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05/23/2021

Does coefficient of variation measure risk?

Does coefficient of variation measure risk?

Coefficient of variation is a measure used to assess the total risk per unit of return of an investment. It is calculated by dividing the standard deviation of an investment by its expected rate of return. Coefficient of variation provides a standardized measure of comparing risk and return of different investments.

How do you test if a coefficient is statistically significant?

If the p-value is less than the significance level (α = 0.05)Decision: Reject the null hypothesis.Conclusion: “There is sufficient evidence to conclude that there is a significant linear relationship between x and y because the correlation coefficient is significantly different from zero.”

Can regression coefficients be greater than 1?

A beta weight is a standardized regression coefficient (the slope of a line in a regression equation). A beta weight will equal the correlation coefficient when there is a single predictor variable. β can be larger than +1 or smaller than -1 if there are multiple predictor variables and multicollinearity is present.

What is the P value in Pearson’s correlation?

The P-value is the probability that you would have found the current result if the correlation coefficient were in fact zero (null hypothesis). If this probability is lower than the conventional 5% (P) the correlation coefficient is called statistically significant.

How do you know if a slope is statistically significant?

If there is a significant linear relationship between the independent variable X and the dependent variable Y, the slope will not equal zero. The null hypothesis states that the slope is equal to zero, and the alternative hypothesis states that the slope is not equal to zero.