  Most models for barrier pricing are designed to let a market maker tune the
model-implied covariance between moves in the asset spot price and moves in the
implied volatility skew. This is often implemented with a local
volatility/stochastic volatility mixture model, where the mixture parameter
tunes that covariance. This paper defines an alternate model where the
spot/volatility correlation is a separate mean-reverting stochastic variable
which is itself correlated with spot. We also develop an efficient
approximation for barrier option and one touch pricing in the model based on
semi-static vega replication and compare it with Monte Carlo pricing. The
approximation works well in markets where the risk neutral drift is modest.
