Kaiser, JonasKrämer, Walter2009-10-292009-10-292009-01http://hdl.handle.net/2003/2648310.17877/DE290R-12657We show that some care should be exercised when inferring true unconditional correlations from observed conditional correlations, which is a frequent problem in empirical finance and elsewhere. We give a general formula for the relationship between the two and demonstrate its importance in the context of the bivariate t-distribution.enDiscussion Paper / SFB 823; 8/2009conditional correlationstock returnst-distribution310330620report