The Key Difference Between Stock Market Crash vs Correction

stock market crash vs correction
Feature	Stock Market Crash	Stock Market Correction
Definition	A sudden and sharp decline in stock prices, typically more than 20% in a very short period.	A moderate decline in stock prices, typically around 10% from recent highs.
Severity	Severe and often panic-driven.	Less severe and more controlled.
Speed	Occurs very rapidly, sometimes within days.	Occurs gradually over days or weeks.
Cause	Triggered by panic selling, economic crises, or unexpected events.	Often due to market overheating, profit-taking, or economic adjustments.
Impact on Investors	Leads to significant losses and widespread fear.	Acts as a short-term risk but often a healthy market reset.
Duration	Can be very short-lived or lead to prolonged bear markets.	Usually short-term and followed by recovery.
Market Psychology	Driven by fear and panic.	Driven by caution and reevaluation.
Historical Examples	1929 Great Depression, 2008 Financial Crisis, 2020 COVID crash.	Multiple minor corrections occur almost every year.
Opportunity	High-risk, potentially high-reward if timed well.	Good entry point for long-term investors.