Sunday, 26 June 2011
When it comes to financial assets, which is the main difference between correlation and covariance?
Q Mr. Economist : When it comes to financial assets, which is the main difference between correlation and covariance
Reply
Reply Don G Covariance and correlation to measure how two random variables gerelateerd.Covariantie - (1) the product of the deviation from the expected return of individual shares in the two different national economies, (2) divided by the various states CovariantieCorrelatie = - covariance / product of any Stnd Dev = CorrelationWeet you're not sure how to identify the key differences between them.
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