Partial correlation coefficients , Financial Management

Assignment Help:

In multiple correlation equations we are often interested in finding out how much of the variation in the dependent variable is explained by one independent variable if all the other independent variables are kept constant.

For example in the equation Y = a + b1 X1 + b2 X2 we may want to find out how much variation in Y is explained by X1 if X2 is kept constant. This is given by the partial coefficient of determination. Using our simplified subscripts the partial correlation coefficient is given by R12.3.

where,   R12.3 =  962_partial correlation coefficient.png

is the partial correlation coefficient between Y and X1 when X2 is kept constant. Note that here there are two subscripts 1 and 2 before the dot unlike the single subscript before the dot in the multiple correlation coefficient discussed earlier. In fact if r13 and r23 are zero R12.3 reduces to r12, the simple correlation coefficient between Y and X1.


Related Discussions:- Partial correlation coefficients

Treasury coupon securities and bills, Many practitioners feel that in...

Many practitioners feel that instead of using only on-the-run issues, all treasury coupon securities and bills are to be used for constructing the theoretical spo

Resource acquisition and resource planning, 1. List five different types of...

1. List five different types of resource that a company might consider hiring or leasing. Explain why the might choose these option instead of outright purchase 2. List three di

How to calculate the future value of an annuity, Calculate the Future Value...

Calculate the Future Value of an Annuity: Annuity is stated as periodic payment every period for a number of periods. This periodic payment is the same each year only then it c

Securitization structure of mortgage backed securities, A mortg...

A mortgage, is sold to the SPV at the discretion of the bank to securitize it into a mortgage backed security, that is, the mortgage is said to

European community, European Community (EC) An economic alliance, evalu...

European Community (EC) An economic alliance, evaluated in 1957, designed to encourage trade and economic cooperation between its members.  The EC is also called the European

Under armour finance, I need a paper on the financial status of the company...

I need a paper on the financial status of the company under armour with ratios using information from yahoo.com finances. & Id like to provide a document with further details

Commodities exchange, Explain the organization and function of commodities...

Explain the organization and function of commodities exchange

Scope of finance function, SCOPE OF FINANCE FUNCTION In several busine...

SCOPE OF FINANCE FUNCTION In several businesses, based on the complexity and size of financial decision-making, the scope of finance function may be categorized into incidenta

Problems in assigning weights, Q. Problems in assigning weights? Proble...

Q. Problems in assigning weights? Problems in assigning weights: for determining the weighted average costs of capital, weight has to assign to the specific cost of the individ

Deferred coupon bonds, Deferred coupon bonds are generally issu...

Deferred coupon bonds are generally issued at a discount price and are used for financing leveraged buyouts. The coupon payment on these types o

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd