ch01 JWBK035-Vince February 22, 2007 21 : 43 Char Count= 0
The Random Process and Gambling Theory 33
FIGURE 1.5 Perfect positive correlation (r=+1.00)
of the variables;for example,X=((X 1 +X 2 +...Xn)/n.)
r=
∑
a(Xa−X)∗
∑
√ a(Ya−Y)
∑
a(Xa−X)
(^2) ∗
√∑
a(Ya−Y)
2
(1.05)
Hereis how to perform the calculation as shownin the table on page34:
1.Average the Xs and the Ys.
2.For each period, find the difference between each X and the averageX
and each Y and the averageY.
FIGURE 1.6 Perfect negative correlation (r=−1.00)