correlation coefficient

Definition

A statistical measure of the interdependence of two or more random variables. Fundamentally, the value indicates how much of a change in one variable is explained by a change in another. Used in portfolio analysis and modeling.

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The company's portfolio manager was perplexed when he saw a high correlation coefficient between the performance of two securities from completely different industries.

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The correlation coefficient was something that I could not figure out, so I let my brother do it for me.

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The correlation coefficient of apple stock and the market index revealed how the performance of one often tracked that of the other.

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