Limitations of Correlation Measurement
All metrics used to analyse financial markets have limitations. As you will see in this video, correlation and covariance are no different.
Overview
While correlation is a helpful measure, it is by no means perfect. Some of its limitations include change over time, correlation vs causation and the relative strength of correlation.
Key learning objectives:
Understand and interpret the limitations of correlation
Summary
Expert
Abdulla Javeri
Abdulla’s career in the financial markets started in 1990 when he entered the trading floor of the London International Financial Futures Exchange, LIFFE, and qualified as a pit trader in equity and equity index options. In 1996, Abdulla became a trainer for regulatory qualifications and then for non-exam courses, primarily covering all major financial products.
05:39
05:38
03:58
04:56
04:34
04:40
05:42
04:41
04:16
07:58
05:14
Related videos
Introduction to Options, Pricing and Use Cases
Peter Eisenhardt • 13:18