Correlation coefficients range from -1 to +1, indicating the strength of relationships between variables. Investors use correlation coefficients for portfolio diversification to reduce risk.

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J Catalano is a CFP and Registered ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J Catalano is a CFP and Registered ...

The CORREL-dependent 12 investment templates will help investors enormously in this Trend-rocking bull market in several years ahead. The S&P 500 select sectors of course stand firm individually, but ...

What is Pearson correlation test, Pearson product moment correlation or Pearson r? Pearson’s correlation helps us understand the relationship between two quantitative variables when the relationship ...

We analyze the Solvency II standard formula (SF) for capital risk aggregation in relation to the treatment of operational risk (OR) capital. We show that the SF implicitly assumes that the correlation ...