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Question: if a box contains tickets numbered $1,4,4,7,$ and three tickets are selected at random from the box without replacement, and we let $X$ be the number on the first ticket and Let $Y$ be the number on the third ticket, what is the correlation of $X$ and $Y$?

Suppose I could ignore the second ticket. Then the first column is $x$, the second column is $y$, and the third column is the probability of $Y$:

 1  4  2/3
 1  7  1/3
 4  4  1/3
 4  1  1/3
 4  7  1/3
 7  4  2/3
 7  1  1/3

Is the probability of $Y$ correct?

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Outline: The correlation coefficient of $X$ and $Y$ is equal to $$\frac{\text{Cov}(X,Y)}{\sqrt{\text{Var}(X)\text{Var}(Y)}}.$$

First we compute $\text{Var}(X)$. Note that $X$ takes on value $1$ with probability $\frac{1}{4}$, value $4$ with probability $\frac{2}{4}$, and value $7$ with probability $\frac{1}{4}$. I assume that now you can compute $E(X)$, and $E(X^2)$, and therefore $\text{Var}(X)$.

Now $Y$ is no trouble! For any of our numbers is just as likely to be third as it is to be first, so $Y$ has the same distribution as $X$.

It remains to calculate $\text{Cov}(X,Y)$, which is $E(XY)-E(X)E(Y)$. The only thing we don't yet know is $E(XY)$.

For this, we need to know the joint distribution of $X$ and $Y$.

For example, $\Pr(X=1\cap Y=4)=\frac{2}{12}$. The easiest way to see this is that the probability the first is $1$ is $\frac{1}{4}$, and given this has happened, the probability that $Y=4$ is $\frac{2}{3}$.

Do a similar calculation for $\Pr(X=1\cap Y=7)$, $\Pr(X=4\cap Y=1)$, $\Pr(X=4\cap Y=4)$, and so on. The work will be easier if you note that the probability that the first is $a$ and the third is $b$ is the same as the probability that the first is $a$ and the second is $b$. Finally, $$E(XY)=(1)(4)\Pr(X=1\cap Y=4)+(1)(7)\Pr(X=1\cap Y=7)+\cdots.$$

Remark: The list you gave gives the conditional probability that $Y=y$ given that $X=x$. It can be thought of as a component of the calculation of the $\Pr(X=x\cap Y=y)$ that we need in order to calculate $E(XY)$.

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  • $\begingroup$ why expect value of X is the same to that of Y ??tickets are selected at random from the box without replacement.so I think they are not independent.... $\endgroup$
    – cecily
    Commented Dec 23, 2014 at 1:44
  • $\begingroup$ You are right, they are not independent. However, they have the same distribution. For simplicity assume the numbers are all different, say 1,2,4,7. Any sequence of $3$ cards is just as likely as any other sequence. The permutation 2, 1, 7 is just as likely as 7, 1, 2. Any card is just as likely to be selected second as it is to be selected first, or third. $\endgroup$ Commented Dec 23, 2014 at 1:52

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