Shown below is a correlation table showing correlation coefficients between stock
price, earnings per share (EPS), and price / earnings (P / E) ratio for a sample of 19 publicly
traded companies.
Correlations: Stock Price, EPS, PE $\begin{array}{lr}
&\text { Stock Price } &\text { EPS }\
\mathrm{EPS} & 0.875 \
\mathrm{PE} & 0.323&-0.111
\end{array}$
a. What is the correlation between stock price and EPS? Interpret.
b. What is the correlation between stock price and PE? Interpret.
c. What is the correlation between EPS and PE? Interpret.

Question

Shown below is a correlation table showing correlation coefficients between stock
price, earnings per share (EPS), and price / earnings (P / E) ratio for a sample of 19 publicly
traded companies.
Correlations: Stock Price, EPS, PE $\begin{array}{lr}
&\text { Stock Price } &\text { EPS }\
\mathrm{EPS} & 0.875 \
\mathrm{PE} & 0.323&-0.111
\end{array}$ 
a. What is the correlation between stock price and EPS? Interpret.
b. What is the correlation between stock price and PE? Interpret.
c. What is the correlation between EPS and PE? Interpret.

Quizplus · Accepted Answer

The Answer of Shown below is a correlation table showing correlation coefficients between stock
price, earnings per share (EPS), and price / earnings (P / E) ratio for a sample of 19 publicly
traded companies.
Correlations: Stock Price, EPS, PE $\begin{array}{lr}
&\text { Stock Price } &\text { EPS }\
\mathrm{EPS} & 0.875 \
\mathrm{PE} & 0.323&-0.111
\end{array}$ 
a. What is the correlation between stock price and EPS? Interpret.
b. What is the correlation between stock price and PE? Interpret.
c. What is the correlation between EPS and PE? Interpret.

Shown Below Is a Correlation Table Showing Correlation Coefficients Between Stock Price EPS EPS0.875PE0.323−0.111\begin{array}{lr}&\text { Stock Price } &\text { EPS }\\\mathrm{EPS} & 0.875 \\\mathrm{PE} & 0.323&-0.111\end{array}EPSPE​ Stock Price 0.8750.323​ EPS −0.111​

Shown Below Is a Correlation Table Showing Correlation Coefficients Between $\begin{array}{lr}&\text { Stock Price } &\text { EPS }\\\mathrm{EPS} & 0.875 \\\mathrm{PE} & 0.323&-0.111\end{array}$