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We investigate the possible drawbacks of employing the standard Pearson estimator to measure correlation coefficients between financial stocks in the presence of non-stationary behavior, and we provide empirical evidence against the…

Statistical Finance · Quantitative Finance 2012-07-27 Giacomo Livan , Jun-ichi Inoue , Enrico Scalas

Chatterjee's correlation coefficient has recently been proposed as a new association measure for bivariate random vectors that satisfies a number of desirable properties. Among these properties is the feature that the coefficient equals one…

Statistics Theory · Mathematics 2024-10-16 Axel Bücher , Holger Dette

Distance correlation is a novel class of multivariate dependence measure, taking positive values between 0 and 1, and applicable to random vectors of arbitrary dimensions, not necessarily equal. It offers several advantages over the…

Computation · Statistics 2024-05-06 Blanca E. Monroy-Castillo , M. A , Jácome , Ricardo Cao

Using random matrix technique we determine an exact relation between the eigenvalue spectrum of the covariance matrix and of its estimator. This relation can be used in practice to compute eigenvalue invariants of the covariance…

Statistical Mechanics · Physics 2010-01-15 Z. Burda , A. Goerlich , A. Jarosz , J. Jurkiewicz

The Pearson correlation coefficient is commonly used for quantifying the global level of degree-degree association in complex networks. Here, we use a probabilistic representation of the underlying network structure for assessing the…

Physics and Society · Physics 2013-05-29 Mathias Raschke , Markus Schläpfer , Roberto Nibali

Distance correlation is a recent extension of Pearson's correlation, that characterises general statistical independence between Euclidean-space-valued random variables, not only linear relations. This review delves into how and when…

Statistics Theory · Mathematics 2020-09-30 Fernando Castro-Prado , Wenceslao González-Manteiga

While the linear Pearson correlation coefficient represents a well-established normalized measure to quantify the interrelation of two stochastic variables $X$ and $Y$, it fails for multidimensional variables such as Cartesian coordinates.…

Data Analysis, Statistics and Probability · Physics 2024-09-19 Daniel Nagel , Georg Diez , Gerhard Stock

In statistics, the Pearson correlation coefficient $r_{x,y}$ determines the degree of linear correlation between two variables and it is known that $-1 \le r_{x,y} \le 1$. In the theory of networks, a curious expression proposed in [PRL…

Disordered Systems and Neural Networks · Physics 2018-03-22 Zafar Ahmed , Sachin Kumar

The maximum correlation of functions of a pair of random variables is an important measure of stochastic dependence. It is known that this maximum nonlinear correlation is identical to the absolute value of the Pearson correlation for a…

Statistics Theory · Mathematics 2020-08-11 Zijian Guo , Cun-Hui Zhang

A prescription is presented for a new and practical correlation coefficient, $\phi_K$, based on several refinements to Pearson's hypothesis test of independence of two variables. The combined features of $\phi_K$ form an advantage over…

Methodology · Statistics 2019-03-12 M. Baak , R. Koopman , H. Snoek , S. Klous

The Pearson correlation, correlation ratio, and maximal correlation have been well-studied in the literature. In this paper, we study the conditional versions of these quantities. We extend the most important properties of the unconditional…

Probability · Mathematics 2019-05-28 Lei Yu

The difficulties of detecting association, measuring correlation, and establishing cause and effect have fascinated mankind since time immemorial. Democritus, the Greek philosopher, underscored well the importance and the difficulty of…

Other Statistics · Statistics 2017-09-20 Donald St. P. Richards

Clustered data are common in practice. Clustering arises when subjects are measured repeatedly, or subjects are nested in groups (e.g., households, schools). It is often of interest to evaluate the correlation between two variables with…

Methodology · Statistics 2025-01-16 Shengxin Tu , Chun Li , Bryan E. Shepherd

The partial correlation coefficient is a commonly used measure to assess the conditional dependence between two random variables. We provide a thorough explanation of the partial copula, which is a natural generalization of the partial…

Methodology · Statistics 2017-06-13 Fabian Spanhel , Malte S. Kurz

Distance correlation is a measure of dependence between two paired random vectors or matrices of arbitrary, not necessarily equal, dimensions. Unlike Pearson correlation, the population distance correlation coefficient is zero if and only…

Methodology · Statistics 2025-06-19 Kontemeniotis Nikolaos , Vargiakakis Rafail , Tsagris Michail

Testing the independence between random vectors is a fundamental problem in statistics. Distance correlation, a recently popular dependence measure, is universally consistent for testing independence against all distributions with finite…

Methodology · Statistics 2024-08-22 Yuwei Ke , Hok Kan Ling , Yanglei Song

Higher criticism is a method for detecting signals that are both sparse and weak. Although first proposed in cases where the noise variables are independent, higher criticism also has reasonable performance in settings where those variables…

Statistics Theory · Mathematics 2010-10-05 Peter Hall , Jiashun Jin

This article examines the limitations of Pearson's correlation in selecting predictor variables for linear models. Using mtcars and iris datasets from R, this paper demonstrates the limitation of this correlation measure when selecting a…

Methodology · Statistics 2024-09-10 Mustafa Attallah

When two variables are related by a known function, the coefficient of determination (denoted $R^2$) measures the proportion of the total variance in the observations that is explained by that function. This quantifies the strength of the…

Applications · Statistics 2013-03-11 Ben Murrell , Daniel Murrell , Hugh Murrell

Filtered Poisson processes are often used as reference models for intermittent fluc- tuations in physical systems. Such a process is here extended by adding a noise term, either as a purely additive term to the process or as a dynamical…

Data Analysis, Statistics and Probability · Physics 2018-05-04 Audun Theodorsen , Odd Erik Garcia , Martin Rypdal