Some correlations are fine though, there are versions of CLT that applies even w... | Hacker News

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		srean 17 days ago \| parent \| context \| favorite \| on: The math that explains why bell curves are everywh... Some correlations are fine though, there are versions of CLT that applies even when there are benign correlations. https://en.wikipedia.org/wiki/Central_limit_theorem#Dependen... I know you know that and were just simplifying. Just wanted this fact to be better known for practitioners. Your comment on multiplicative processes is spot on. I say more here https://news.ycombinator.com/item?id=47437152 It's bit of a shame that these other limiting distributions are not as tractable as the Gaussian.

btilly 17 days ago [–]

Absolutely. The effect of straightforward correlations is a change in the variance, which can be measured in finance.

The effect of the nonlinear changing correlations is that future global behavior can't be predicted from local observations without a very sophisticated model.

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