Shown below is a correlation table showing correlation coefficients between stock price, earnings per share (EPS), and the price/earnings (P/E) ratio for a sample of 19 publicly traded companies.      Stock Price EPS P/E Stock Price EPS P/E 1.000 0.875 0.323 1.000 -0.111 1.000     What is the correlation between stock price and EPS? Interpret. What is the correlation between stock price and P/E? Interpret. What is the correlation between EPS and P/E? Interpret.

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter4: Equations Of Linear Functions
Section4.5: Correlation And Causation
Problem 24PFA
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Shown below is a correlation table showing correlation coefficients between stock price, earnings per share (EPS), and the price/earnings (P/E) ratio for a sample of 19 publicly traded companies. 

 

 

Stock Price

EPS

P/E

Stock Price

EPS

P/E

1.000

0.875

0.323

1.000

-0.111

1.000

 

 

  1. What is the correlation between stock price and EPS? Interpret.
  2. What is the correlation between stock price and P/E? Interpret.
  3. What is the correlation between EPS and P/E? Interpret.
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