Sample Question #272 (statistics / econometrics)
My junior quant just told me that when I run a regression like y=bx+e, where y is the dependent variable and x the independent variable, the coefficient estimate on b is just the correlation between x and y. I’m not too sure about what he said. What do you think? Is the coefficient estimate the same as the correlation?
I also heard that the R2 from the regression can be interpreted as some kind of correlation. Can you explain?
(Comment: A lot of quants mix up these concepts)