@Aswath Damodaran Professor, kindly note that in the first scatter plot Disney was put as an independent variable on the X Axis, while the S&P was the dependent variable on the Y Axis. The rest of the video explains that Disney's returns are dependent and thus related to the S&P. Am I missing something? Thank you!
The names should have been inverted... In fact in the video it is said that the intercept is 0.007 or that a 0% return for S&P represents 0.007% for Disney and the graph shows the opposite.
Professor Damodoran, when I worked though introductory econometrics from Wooldridge in a class I remember the assumption being no PERFECT colinearity. Where is the cutoff for too highly correlated independent variables?
they have one for correlation as well although it shows only the correlation itself and no standard error or t stat, if anyone has a way to fix that or another method to do it (within excel) i'd be very happy to hear about it :D
