Portfolio Optimization is to minimize the risk exposure to the broad market and maximize the potential return of the portfolio, and it is different from Risk Management (§ 5.4) and Money Management (§ 5.5) which focuses on an individual position. We use 20 days correlation coefficient with S&P500 as the primary measurement of the portfolio’s risk exposure. The ideal correlation coefficient of the portfolio with the index is within the positive or negative 10% range. We have a watch list that often consists of more than forty pairs waiting for execution. When one existing position is becoming less attractive, determined by its past three to five days’ performance and correlation coefficient with S&P500 to the portfolio, we will swap it with a pair from our watch list. We do not exit a position for the sole purpose of minimizing the correlation with the index.