How to interpret correlation matrix?
Regarding 1) Usually you would check this based on &quot;tests&quot; like the VIF (see this post for details). I personally would not be too worried with a correlation of 0.5.
Regarding 2) Not really since you would need to &quot;decorrelate&quot; the variables and you can only do linear transformations (when you want to preserve the variable(s)). What you can do is to make projections, e.g. by principle components, but this will totally change the variable set.