Illusory Correlation Examples: How it’s Harming You And 3 Ways To Stop It?

illusory correlation example
Illusory Correlation Example

Illusory Correlation is the reason for the loss of people’s money in the stock market, all the phobias, etc. Do you want to know how? Let’s understand this example. 

We all know about the billionaire about Bill Gates. The success of Bill Gates is known to everybody.  He was born on October 28, 1955, in Seattle, Washington. Do you want to become like Bill Gates? No need to tell you about it. Still, He was the co-founder of Microsoft, the world’s largest personal computer software company. 

He was a born genius and way ahead of his time. In school, he with his teammates formed his school payroll system. In 1975, he left Harvard University to develop one of the first software and most successful software for computers. 

Do you want to achieve Bill Gates’s success? Probably, yes. Let me discuss with you some of the facts. 

“The highest five-year survival rate for new business is 51.3% and ultimately only one out of every ten startups remains alive.”

Does this fact stop people from building their start-ups? Not at all. 

In fact, there were more than 1,600 tech startups alone in India. If most of the entrepreneurs know that they are going to fail, why do they found a startup in the first place? The answer is simple, Illusory Correlation. 

What is Illusory Correlation?

What Is Illusory Correlation?

As per Wikipedia, 

“ In psychology, illusory correlation is the phenomenon of perceiving a relationship between variables (typically people, events, or behaviors) even when no such relationship exists.”

It simply means an exaggeration. It can be for anything people, person, or behavior. It usually harms people in most cases but for some, it has also brought a fortune. 

Let’s understand this definition with the help of an example, 

Each one of us knows that stock markets are risky. In the stock market, only 20% of the investors are able to make a profit. The question now arises is- Why do people invest in the stock market, then? 

The answer is Illusion Corrections. Let me explain. Human beings are not rational but emotional beings. We give value to things that enrich us emotionally.

When any of the investors in the 20% bracket says, “See, I made this much profit from the stock market.” Your chemicals kick in and say, “Wow! I should also try the stock market.” Your emotional side overpowers your logical side and you forget the fact that 80% of the people are going to fail. 

How to fight Illusory Correlation Example?

How To Fight Illusory Correlation Example?

The next question in your mind would be- “If it’s this dangerous, how do I fight it?” Good question. There is no secret pill or technique that completely removes illusory correlation completely. It depends on your intelligence and wit. I am definitely going to tell you some effective tips but they are not enough. The wiser you grow, the less you find yourself in illusory correlation. 


Can you hit your enemy if you cannot see? You are right. You can’t. You are really smart. Well, can you eliminate illusory correlation if you don’t know you are in illusory correlation? You are right. You can’t. Therefore, you need journaling to know when you are getting in illusory correlation. Getting aware of something is the first step to change that thing. 

You can train your mind to do journaling every night or anytime you like. If you want to know how to install a habit, you can check out this article.


It is one of the most underestimated things. We tend to accept things as it is. For example, Most of the students in your class before their exam will go to the temple. Why? They try to win God by offering all kinds of things. ( God has a much more important task than to pass somebody!).  They don’t understand this simple thing and fall prey to illusory correlation. 

The next time when you find yourself under an illusory correlation example then questions yourself. You can use this script to help you initially,

What are the advantages of this? 

What are the advantages of this?

What if everything goes right?

What if everything goes wrong? 

Taking calculated risks 

I cannot emphasize this point. Most of the people’s tagline is- 

“ You must go for stability and should not take risks.”

In simple words, they don’t take risks. If they do take risks then it’s also not calculated.

What are calculated risks?

What will you do if you want to do your own start-up? (We will consider that you don’t have business experience. Let’s say you are a foodie and want to open a food startup. Should you use your life’s savings and start a restaurant?

If your answer is yes then it is an example of uncalculated risks(provided you have no experience in the food business).

What should you do now? 

Take calculated risks. You cannot start a restaurant but you can start your own youtube channel


We all face illusory correlations from time to time. You just have to try to eliminate it as much as possible. It is important to give time. This thing known as illusory correlation is deep-seated in our psychology and cannot be removed easily. (I doubt if it can be removed completely). 

Don’t forget to tell us. What was one situation where you found yourself under illusory correlation? 

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