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In this paper, the authors propose a novel method to derive exact closed-form ergodic capacity and outage probability expressions for correlated Rayleigh fading channels with receive diversity. Unlike the existing works, the proposed method employ a simple approach for the capacity and outage analysis for receiver diversity channels operating at different signal-to-noise ratios depicted in the diagonal elements of matrix. Ergodic channel capacity and outage probability are two important parameters to be considered for the design of a given communication system. As such the Shannon capacity formula, initially derived for Gaussian environment, gives an upper bound for maximum transmission rate. Capacity however depends on the nature of a particular channel environment.
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