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The performance of a dual-branch decorrelator receiver operating in correlated Rayleigh and Rician fading channels in conjunction with switch-and-stay combining (SSC) is analyzed and compared to the performance of a conventional SSC receiver. Analytical expressions for the average bit error rate (BER) of several modulation techniques of practical interest, the mean output signal-to-noise ratio (SNR) and the outage probability are derived. It is shown that the decorrelator receiver has superior performance over the conventional receiver by as much as 2.83 dB in average SNR. The effects of modulation order, correlation coefficient and the severity of fading on the performance of the decorrelator receiver are studied.