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Old 12-15-2005, 12:50 PM
Tater10 Tater10 is offline
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Join Date: Feb 2004
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Default Correlation

Is correlation and the correlation coefficient the same thing?

data i = 7,8,10,9,5,4
data j = 8,7,13,7,5,7

I have a modern portfolio theory book which states that the correlation coefficient = covar(i,j) / [STD(i)*STD(j)]

in excel, i get the covar = 3.52778, which seems fine, and i agree with

however, using the function correl(i,j), i get .673278
Using covar(i,j) / [STD(i)*STD(j)] however, i get .561065

I can duplicate the .673278 with an anova table (been a while, but i sum up X*Y, X*X, Y*Y, blah blah)

So, i guess my question is, what is covar(i,j) / [STD(i)*STD(j)] ?? I'm missing something.

Thanks in advance,
tater10
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