10 x 10 – 9 x 9 + 8 x 8 – 7 x 7 + 6 x 6 – 5 x 5 + 4 x 4 - 3 x 3 + 2 x 2 - 1 x 1
=
10 + 9 + 8 + 7 + 6 + 5 + 4 + 3 + 2 + 1
=
the number of unique variances + unique covariances 10 stocks will have
and similarly…
8 x 8 – 7 x 7 + 6 x 6 – 5 x 5 + 4 x 4 - 3 x 3 + 2 x 2 - 1 x 1
=
8 + 7 + 6 + 5 + 4 + 3 + 2 + 1
=
the number of unique variances + unique covariances 8 stocks will have
but…
-1 x -1 + 2 x 2 – 3 x 3 + 4 x 4 – 5 x 5
Doesn’t equal
1 + 2 + 3 + 4 + 5
Goofy huh.
I’ll leave you with this…
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