Measuring Stock Performance Against The Market by Gideon Vigderhous, PhD
You know what correlation is, but what about partial correlation? Here we introduce you to a statistical measure that takes the pulse of stock performance relative to the market.
A common practice in measuring stock performance is to compare it to a benchmark such as the S&P 500. The measure basically compares the percent change of a stock in a given period with the percent change of the market. By comparing the two, the measure derives a conclusion on how the stock performed relative to the market ...