For example, the amount of gasoline your ... We’ll spare you the mathematics behind how correlation coefficients are calculated, but the general takeaway is the closer to zero a correlation ...

In the above example, Apple and the S&P 500 have a correlation coefficient of 0.73817, which indicates a strong relationship between the two over 90 days of data.

Jason Fernando is a professional investor and writer who enjoys tackling and communicating complex business and financial problems. David Kindness is a Certified Public Accountant (CPA) and an ...

Example of using correlation coefficients Let’s say that you own three stocks, which we’ll call Company A, Company B, and Company C. All three are growth stocks in the technology space.

Thus, if we calculate the correlation coefficient including this outlier, it would suggest a weaker correlation between the stock and the S&P 500 than actually exists on most trading days.

For both correlation coefficients it is possible to conduct a hypothesis ... 16 students to see if the 2 sets of exam results are correlated. General chemistry and mathematics exams were both scored ...

I often teach in my statistics class that correlation should not be confused with causation. That is, observing that two variables move together does not necessarily mean that one variable caused the ...

Dylan Matthews is a senior correspondent and head writer for Vox’s Future Perfect section and has worked at Vox since 2014. He is particularly interested in global health and pandemic prevention ...