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Professionals working in financial markets must use effective risk management tools to prepare for unpredictable changes and their potential impact on investment portfolios. Anticipating Correlations, a book written by Nobel Prize-winning economist Robert Engle and published by Princeton University Press, considers how to better forecast correlations among large systems of assets. Over twelve chapters, Engle explores several models and their applications in estimating correlations, including his new method: Dynamic Conditional Correlation (DCC). Chapter 4, Dynamic Conditional Correlation, presents the central concept of the book in three steps. The chapter examines the processes of DE-GARCHING, estimating quasi-correlations, rescaling the DCC, and estimation of the DCC model. This chapter is excerpted from 'Anticipating Correlations: A New Paradigm for Risk Management'.