The formula for Pearson’s correlation coefficient, r, relates to how closely a line of best fit, or how well a linear regression, predicts the relationship between the two variables. It is presented ...

Correlations are used in advanced portfolio management, computed as the correlation coefficient, which has a value that must fall between -1.0 and +1.0. Key Takeaways ...

Serial correlation occurs in a time series when a variable and a lagged version of itself (for instance a variable at times T and at T-1) ... Coefficient of Determination: ...

There are two key assumptions for the Spearman’s rank correlation coefficient: The data should be on the ordinal or continuous scale. An example of an ordinal variable is a survey question that ranks ...

A correlation coefficient is a number used to describe the strength of a relationship between two variables. These numbers range from -1 to +1, with zero describing no correlation at all.

Assessment of correlation coefficients between securities of interest and a single market factor that an existing portfolio is largely exposed to, e.g. S&P 500.