Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

There are a lot of SEO studies out there, but not all of them are made equal. Here's how to decide if X is really affected by Y, or merely a coincidence. Every so often the SEO community will erupt ...

Most of us have heard the phrase "correlation does not equal causation." But understanding how scientists move beyond identifying correlations to establish causation remains a mystery to many. Finding ...

In the first case, there is a strong upward-sloping relationship between X and Y; in the second case, no apparent relationship; in the third case, a strong downward-sloping relationship. Note the ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Correlation analysis in portfolio management design is overrated. There isn’t much benefit derived from relying on low correlation among asset classes to achieve excess return. The best way to use ...

A correlation coefficient is a statistical measure of the degree to which changes to the value of one variable predict change to the value of another. In positively correlated variables, the value ...

There’s an old saying that goes, “figures don’t lie, but liars can figure.” But sometimes even the figures can spin a confusing story. That’s why I’ve always appreciated the power of understanding ...

I often teach in my statistics class that correlation should not be confused with causation. That is, observing that two variables move together does not necessarily mean that one variable caused the ...