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Micro-correlations

Micro Correlations. Micro-correlations. A little bit sometimes goes a lot further than you think Cooke and Kousky nsf # 0960865. Fat Tails. Tail Dependence. http://www.rff.org/Events/Pages/Introduction-Climate-Change-Extreme-Events.aspx.

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Micro-correlations

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  1. Micro Correlations Micro-correlations A little bit sometimes goes a lot further than you think Cooke and Kousky nsf# 0960865 Fat Tails Tail Dependence http://www.rff.org/Events/Pages/Introduction-Climate-Change-Extreme-Events.aspx

  2. since they’re picking counties randomly, their portfolios will be uncorrelated choose 500 counties at random and buy all the flood insurance policies you can find You’re an Insurance CEO, With Blue Agent and Green Agent

  3. %$#! If they BOTH have a bad year I’m broke !!!

  4. Look at the data:

  5. “Neighbor” Correlations ! What’s going on????

  6. Each blue county is very near a green county If Blues are independent and Greens are independent, then SUMS are correlated like Neighbors…..in THIS data about 0.5

  7. There’s something else….Lets find out Simulation

  8. Micro Correlations: too small to see  too small to be Fat Tails Tail Dependence The Unholy Trinity: http://www.rff.org/Publications/Pages/PublicationDetails.aspx?PublicationID=20949

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