#reading-9-probability-concepts
Correlation is a number between −1 and +1 that measures the co-movement (linear association) between two random variables: ρ(Ri,Rj) = Cov(Ri,Rj)/[σ(Ri) σ(Rj)].
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Summary d value of the cross-product of the deviations of the two random variables from their respective means: Cov(R i ,R j ) = E{[R i − E(R i )][R j − E(R j )]}. The covariance of a random variable with itself is its own variance.
<span>Correlation is a number between −1 and +1 that measures the co-movement (linear association) between two random variables: ρ(R i ,R j ) = Cov(R i ,R j )/[σ(R i ) σ(R j )].
To calculate the variance of return on a portfolio of n assets, the inputs needed are the n expected returns on the individual assets, n variances of return on the indiv Summary
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