Thursday, June 6, 2013

Chains of meaning.

I just went down the rabbit hole with wikipedia, starting with the page for a value called Beta (ß) which is defined as the covariance of two things divided by the variance of one of them (two specific things, but we'll leave that be for now) and to understand it, I went through covariance to variance to volatility, to standard deviation of a logarithmic return - and at the end of this path, I found R=Pe^(rt), a blessed formula I know from calculus and from there, I went back up those chains and now I know what ß is. Minds work in funny ways.

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