The correlation coefficient is a linear regression performed on each stock's returns against the other. If mapped graphically, a positive correlation would show an upward-sloping line.

On the right side are a, our constant (or intercept), and b, our coefficient (or slope), multiplied by X, our independent (or explanatory) variable, education. The regression says in algebra that ...

On the right-hand side are a, our constant (or intercept), and b, our coefficient (or slope) multiplied by X, our independent (or explanatory) variable, education. The regression says in algebra that ...

Correlation is commonly expressed as a coefficient with values ranging between -1.0 and 1.0. ... You can think of regression to the mean and correlation as the flip sides of the same coin.

R 2 is a statistical measure of the goodness of fit of a linear regression model (from 0.00 to 1.00), also known as the coefficient of determination. In general, the higher the R 2 , the better ...