Correlation_Chart

Correlation_Chart - xy = xy x y x 2 = E(X 2 )-E(X) 2 =...

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Correlation Chart Return on B 0% 8% Return 4% 0.4 0.15 0.55 on A 6% 0.1 0.35 0.45 0.5 0.5 E(X) σ^2(X) σ(X) A 4.90% 0.0099% 0.995% B 4.00% 0.1600% 4.000% ρAB AB 0.2160% - 0.0200% 0.5025 Correlation Variance Covariance = E(X*Y) – E(X)E(Y)
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Unformatted text preview: xy = xy x y x 2 = E(X 2 )-E(X) 2 = E(X-X exp ) 2 = (x-x exp )Pr(x) xy = E[(X-X exp )(Y-Y exp )] = (x-x exp )(y-y exp )Pr(x|y)...
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