Level 1 Chartered Financial Analyst (CFA ®): Correlation, covariance and probability topics

[@ZERO-CAPACITANCE]

Excellent, just subscribed

[@michaelmeechan8328]

How do you get the standard deviation that you show?

[@chrislawless1983]

Maybe I'm wrong, but for the correlation example (16 minutes in) I have the answer as 0.931. Unless it's a rounding issue?

[@bionicturtle]

Hi Chris, Yes that appears to be rounding: if we retain the rounding (as displayed), the correlation appears to be = 0.0031/(0.084*0.04) = 0.92262 which rounds to 0.92 but does roundup to 0.93. The exact solution is given by 0.003062 /(0.08378 * 0.03966) = 0.92144 which rounds to the displayed 0.92. Thank you for checking!