In light of the financial market crisis in 2008, classical portfolio theory and the functioning of correlations have come under renewed scrutiny. Svend Reuse analyzes the behavior of correlations in extreme situations, taking into account irrational market behavior. Based on the results of an empirical survey of 1,000 German credit institutions regarding the practical behavior of correlations and asset allocation management, the author evaluates market data-based irrationality indices. Using these, he develops his own model for the tactical outperformance of the classical Markowitz approach. Finally, he presents a modified options pricing model for hedging correlation risks.