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Trading Terms

Correlation Coefficient

The relationship between two variables, X and Y, can be measured by the covariance of X and Y divided by the square root of their individual variances. This method helps us understand how these variables tend to change together. It is important to note that this measurement is influenced by the amount of variation in each individual variable. Therefore, it is crucial to consider both the covariance and variances when analyzing the relationship between two variables.
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Trading Terms encompass terminology and phrases commonly used in financial markets, including terms
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