Correlation analysis in portfolio management design is overrated. There isn’t much benefit derived from relying on low correlation among asset classes to achieve excess return. The best way to use ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

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 ...

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 ...

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

The correlation function is a useful signal-analysis tool that engineers often overlook. Its formidable equation, which you have probably not thought about since your undergraduate signals and systems ...