Regression and Correlation


If you've ever attended a so called higher education course - Decision Making is one of the subjects they teach you. 

Apparently all models need some entry parameters and in finance it is the so called rational investor. Please note it is referred to as rational not greedy.

If you wanna read a good book about Decision Making pick Daniel Kahneman's "Thinking, Fast and Slow".

I like the chapter (17) when he explains mean regression and bridges to correlation.
I can not relate to the examples provided earlier in his book I believe they are by now outdated especially when he refers to work of the 70s also there is a bias towards US stereotypes.
But the chapter mentioned above is worth reading the book. 


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