Correlations and Copulas
4 important questions on Correlations and Copulas
What is the deal with dependence and independence?
What are the three rules of copulas?
What is a copula?
A copula is a special type of distribution function which is used to describe (or build) the dependence between two or more random variables. It describes the dependence structure among the components.
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The joint distribution of a random vector can be written in terms of marginal distribution functions and a copula. What do the marginals describe?
The marginals describe the marginal distribution of each component of the random vector, while the copula describes the dependence structure among the components.
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