Jason Fernando is a professional investor and writer who enjoys tackling and communicating complex business and financial problems. David Kindness is a Certified Public Accountant (CPA) and an expert ...

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Correlation coefficients are indicators of the strength of the linear relationship between two different variables, x and y. A linear correlation coefficient that is greater than zero indicates a ...

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

Since the correlation coefficient is limited to historical data, it would be challenging to use it as a forecasting tool. Correlation is used in quantitative analysis (as opposed to fundamental ...