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 .

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.

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 example, one may be interested in finding the correlation (coefficient) between (1) frequency of smoking and incidence of lung cancer, (2) scores in statistics and math exam, (3) per capita ...

Example 8.1: Correlation. This example defines modules to compute correlation coefficients between numeric variables and standardized values for a set of data. /* Module to compute correlations */ ...

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 ...

Discover the meaning of a negative correlation coefficient, how it compares to other correlation coefficients, and examples of where they might appear. Skip to content. News Markets ...

Figure 3: Effect of noise and sample size on Pearson's correlation coefficient r. ( a ) r of an n = 20 sample of ( X , X + ɛ), where ɛ is the normally distributed noise scaled to standard ...