How to calculate correlation between XY and XZ?
I have three independent random variables X, Y and Z, uncorrelated between each other. Y and Z have zero mean and unit variance, X has zero mean and given variance. Do you know how to compute the correlation between the products XY and XZ?
What is the correlation of a pair of random variables?
The correlation of a pair of random variables is a dimensionless number, ranging between +1 and -1. It is +1 only for a perfect upward-sloping relationship (where by “perfect” we mean that the observations all lie on a single line), and is -1 for a perfect downward-sloping relationship.
What are the possible correlations between three variables?
It’s a common interview question. The question goes like this: “Say you have X,Y,Z three random variables such that the correlation of X and Y is something and the correlation of Y and Z is something else, what are the possible correlations for X and Z in terms of the other two correlations?”
Is there a relationship between X and Y?
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 pairwise products: When X and Y are big together, a large product results; when at least one of X or Y is small, the product is not so large.
How to calculate partial correlation between X and Y?
Calculate Partial Correlation 1 rxy = Correlation between variable x and y 2 rxz = Correlation of the third variable z with the variable x 3 ryz = Correlation of the third variable z with the variable y
How to calculate the correlation between two variables?
Partial correlation, calculates the correlation between two variables to the exclusion of a third variable. This makes it possible to find out whether the correlation r xy between variables x and y is generated by the variable z.