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.
Use this term in a sentence
“ The company's portfolio manager was perplexed when he saw a high correlation coefficient between the performance of two securities from completely different industries. ”
“ The correlation coefficient was something that I could not figure out, so I let my brother do it for me. ”
“ The correlation coefficient of apple stock and the market index revealed how the performance of one often tracked that of the other. ”
