Correlation coefficients are indicators of the strength of the linear relationship between two different variables, x and y. A linear correlation coefficient that is greater than zero indicates a ...

Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Thomas J Catalano is a CFP and Registered Investment Adviser with the state of ...

Once the ranks for the two variables are found, we apply the formula for the correlation to the ranks as follows: Both Spearman’s rank and Pearson’s correlation tests share the purpose of assessing ...

Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Yarilet Perez is an experienced multimedia ...

Last month we explored how to model a simple relationship between two variables, such as the dependence of weight on height 1. In the more realistic scenario of dependence on several variables, we can ...

Investors understand intuitively that some stocks are riskier than others. The capital asset pricing model attempts to quantify the common perception of risk using a term called beta. By understanding ...