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A New Method for Generating Random Correlation Matrices

Ilya Archakov, Peter Reinhard Hansen, Yiyao Luo

arXiv 15 Oct 2022 · Econometrics · publishedEconometrics Journal (2023) · 9 citations (OpenAlex)

arXiv:2210.08147 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We propose a new method for generating random correlation matrices that makes it simple to control both location and dispersion. The method is based on a vector parameterization, gamma = g(C), which maps any distribution on R^d, d = n(n-1)/2 to a distribution on the space of non-singular nxn correlation matrices. Correlation matrices with certain properties, such as being well-conditioned, having block structures, and having strictly positive elements, are simple to generate. We compare the new method with existing methods.

Citation extraction

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Archakov \ Hansen (2021) `A new parametrization of correlation matrices', Econometrica 89, 1699–17150.89911473%
2Joe (2006) `Generating random correlation matrices based on partial correlations', Journal of Multivariate Analysis 97, 2177–21890.87482100%
3Archakov \ Hansen (2022) `A canonical representation of block matrices with applications to covariance and correlation matrices', Forthcoming in Review o…0.6444250%
4Marsaglia \ Olkin (1984) `Generating correlation matrices', SIAM Journal on Scientific Computing 5, 470–4760.64441100%
5Pourahmadi (2011) `Covariance estimation: The GLM and regularization perspectives', Statistical Science 26, 369–3870.64422100%
6Pourahmadi \ Wang (2015) `Distribution of random correlation matrices: Hyperspherical parameterization of the Cholesky factor', Statistics and Probabilit…0.64422100%
7Archakov \ Hansen (2020) `A generalized Fisher transformation for correlation matrices: A simulation study of its finite sample properties', https://site…0.51121100%
8Bendel \ Mickey (1978) `Population Correlation Matrices for Sampling Experiments', Communications in Statistics - Simulation and Computation 7, 163–1820.51121100%
9Chalmers (1975) `Generation of correlation matrices with a given eigen–structure', Journal of statistical computation and simulation 4, 133–1390.51121100%
10Davies \ Higham (2000) `Numerically stable generation of correlation matrices and their factors', BIT Numerical Mathematics 40, 640–6510.51121100%

Showing the top 10 of 21 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Cluster GARCH0.40511
2The Generalized Fisher Transformation: Finite-Sample Properties and Inference0.40511
3A Multivariate Realized GARCH Model0.00011