Covariance and correlation from a joint probability function (for the @CFA Level 1 returns)
HTML-код
- Опубликовано: 28 июл 2024
- Covariance and correlation from a joint probability function (for the @CFA Level 1 returns) explores how to derive both covariance and correlation between the returns on two assets.
#shorts #cfa #cfaexam #cfalevel1 #cfainstitute
thank you
it would be very much appreciated if you make a series not explaining the formula but straight telling us how to do it easily on the calculator
Yes, good point👍 will take it on board!
Could you explain us how to compute the covariance with the [data] function of the calculator ?
Yes, I though I had a video on this. It seems I was wrong :) I hope to get around to recording one soon.
why are we not taking the returns as percentages x/100 and we are taking them in units? the result is quite different. thanks
Well, taking the numbers as units, as long as you do it consistently, makes them easier to work with. You could get the same result expressing the numbers in decimal form, but you would get into a lot of confusion with units.
Could you explain why you don't divide the sum by n or n-1?
You would do that if you were presented with actual observations. In this case you are given outcomes with associated probabilities, which we use as weights, so there is no need to divide by the number of observations.
@@letmeexplaincfa very clear, thanks!
@@letmeexplaincfa
Respected Sir I done one problem with two different formula of covariance which are a little bit change with one another I thought the result will be the same but I got different result from the both
1. In one we use probability as weightage and as well as expected return like same you were used in the above video
2. In another we use mean of the return
Sir plz guid me why I got different result I did everything accurately according to both formulas
Should the results same or different?
Plz Sir guide me