An Association represents a group of related Items. Whereas Correlation concerns grouping multiple Agent Events into a single Item (aka Business Object), Association groups multiple related Items together.
Associations group items within a single Flow or across multiple Flows. For example, you could associate child orders with a parent order in a single Orders flow. You could also associate executions with that order, which is an example of an association across Flows. Another example of Association across Flows would be where you are you streaming out executable rates. When an order is observed which is executing against one of those rates, you could associate the order to the rate via the quote reference in the order.
Both associations and correlations are subject to the same Correlation Window.