Joint Probability
📈 Investing
intermediate

Quick Definition

Joint probability is the likelihood of two or more events occurring simultaneously.

Formula

P(A \cap B) = P(A) * P(B | A)

Examples

  • 1Calculating the probability of both a stock and a bond increasing in value on the same day.
  • 2Determining the likelihood of interest rates rising while inflation rates also increase.
  • 3Assessing the probability of a company's earnings exceeding expectations at the same time that its stock price hits a new high.

Tags

probabilitystatisticsrisk-analysisinvestment-analysisfinancial-modeling
Quick Info
Category:Investing
Difficulty:intermediate
Last Updated:6/19/2025