FAQ: Calculating Financial Statistics - Correlation II

This community-built FAQ covers the “Correlation II” exercise from the lesson “Calculating Financial Statistics”.

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This exercise can be found in the following Codecademy content:

Analyze Financial Data with Python

FAQs on the exercise Correlation II

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I’m stuck at the 3rd part of this question, where it keeps asking me
" Are you multiplying together the respective elements in the zipped lists set_x and set_y ?

from data import returns_general_motors, returns_ford, returns_exxon_mobil, returns_apple
from math import sqrt
import numpy as np

def calculate_correlation(set_x, set_y):

Sum of all values in each dataset

sum_x = sum(set_x)
sum_y = sum(set_y)

Sum of all squared values in each dataset

sum_x2 = sum([x ** 2 for x in set_x])

sum_y2 = sum([y ** 2 for y in set_y])

Sum of the product of each respective element in each dataset

sum_xy = 0
for i, j in zip(set_x, set_y):
sum_xy += set_x[int(i)] * set_y[int(i)]

Length of dataset

n = len(set_x)

Calculate correlation coefficient

numerator = n * sum_xy - sum_x * sum_y
denominator = sqrt((n * sum_x2 - sum_x ** 2) * (n * sum_y2 - sum_y ** 2))

return numerator / denominator

Function calls

print(‘The correlation coefficient between General Motors and Ford is’, calculate_correlation(returns_general_motors, returns_ford))
print(‘The correlation coefficient between General Motors and ExxonMobil is’, calculate_correlation(returns_general_motors, returns_exxon_mobil))
print(‘The correlation coefficient between General Motors and Apple is’, calculate_correlation(returns_general_motors, returns_apple))

It took me a while to figure this out as well. Instead of:

for i, j in zip(set_x, set_y):
sum_xy += set_x[int(i)] * set_y[int(i)]


for i,j in zip(set_x,set_y):
sum_xy += i * j