What is 'Multicollinearity'
Multicollinearity, in statistics, is the occurrence of several independent variables in a multiple regression model closely correlated to one another. Multicollinearity can cause strange results when attempting to study how well individual independent variables contribute to an understanding of the dependent variable. In general, multicollinearity can cause wide confidence intervals and strange P values for independent variables.
BREAKING DOWN 'Multicollinearity'
Multicollinearity suggests that several of the independent variables are closely linked in some way. Once the collinear variables are identified, it may be helpful to study whether there is a causal link between the variables. The simplest way to resolve multicollinearity problems is to reduce the number of collinear variables until there is only one remaining out of the set. Sometimes, after some study it may be possible to identify one of the variables as being extraneous. Alternatively, it may be possible to combine two or more closely related variables into a single input.

Variance Inflation Factor
A measure of the amount of multicollinearity in a set of multiple ... 
Sensitivity Analysis
Sensitivity analysis is a technique used to determine how different ... 
Variable Cost Ratio
Variable costs expressed as a percentage of sales. The variable ... 
Random Variable
A variable whose value is unknown or a function that assigns ... 
Shadowing
The process of creating values for variables that don't rely ... 
Variability
The extent to which data points in a statistical distribution ...

Markets
Understanding Regression
Regression is a statistical analysis that attempts to predict the effect of one or more variables on another variable. 
Trading
What's a Sensitivity Analysis?
Sensitivity analysis is used in financial modeling to determine how one variable (the target variable) may be affected by changes in another variable (the input variable). 
Retirement
Variable Annuity Basics
Find out how variable annuities can help you plan for retirement by offering the returns of the stock market with the guarantee of insurance. 
Financial Advisor
Variable Annuities: The Pros and Cons
Variable annuities are one of the most complicated financial instruments. Here is an in depth look at their pros and cons. 
Trading
Using Trading Indicators Effectively
Select multiple indicators, avoid information overload and optimize indicators to effectively use technical analysis tools. 
Trading
What's the Correlation Coefficient?
The correlation coefficient is a measure of how closely two variables move in relation to one another. If one variable goes up by a certain amount, the correlation coefficient indicates which ... 
Retirement
Variable Annuities: The Good, The Bad and the Ugly
An indepth guide to everything you need to know and watch out for with variable annuities. 
Retirement
How a Variable Annuity Works After Retirement
These investments can provide extra income after you retire. Here’s a guide to when and how you will receive the payout. 
Investing
Scenario Analysis Provides Glimpse Of Portfolio Potential
This statistical method estimates how far a stock might fall in a worstcase scenario. 
Retirement
Variable Vs. Variable Universal Life Insurance
Do you know why you might need one policy versus the other? Read on to find out.

Which is wiser, rolling over my traditional IRA to variable annuity or vice versa? ...
I am 46 years old. I have a traditional IRA and Variable Annuity. What will it cost me to roll either way? ... Read Answer >> 
What is the difference between linear regression and multiple regression?
Learn the difference between linear regression and multiple regression and how multiple regression encompasses not only linear ... Read Answer >> 
What is the difference between direct costs and variable costs?
Learn about variable costs and direct costs, how direct costs and variable costs are classified and the differences between ... Read Answer >> 
What are the variables in variable costs?
Learn about variable costs. Explore how and why these costs may fluctuate, as well as ways in which they may differ from ... Read Answer >> 
How are variable annuities regulated?
Discover the various rules that the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority ... Read Answer >> 
How liquid are variable annuities?
Understand whether variable annuities are liquid. Learn more about the two types of variable annuities and which is more ... Read Answer >>