Correlation is a well-established concept to capture the linear relationship between two or more variables. This article covers basic properties, fallacies of correlation and correlation risk in financial applications.
In this paper, we investigate the relation between two variables where the one is measured with the ratio or interval scale and the other with the nominal. In this cases, we use from serial correlation coefficient. Computation of some serial coefficient such as biserial and point-biserial coefficient is carried out with some examples and R program.