Correlations
Sources:
Dwarkesh Patel has discussed correlations in various contexts, focusing on different topics such as passive investments, IQ, and AI risks.
-
Passive Investing Correlations: Brett Harrison explains that passive investments can create correlated activity between instruments included in index products, leading to synchronized movements due to their inclusion in indices like the S&P 500. This can result in temporary dislocations in stock prices, especially in illiquid markets, though arbitrage usually corrects these discrepancies over time 1.
-
Correlations and IQ: In a conversation with David Deutsch, Patel discusses the high correlation (0.8) in IQ scores between identical twins separated at birth, suggesting a significant genetic contribution to IQ. They also talk about various factors, including brain differences like skull size, correlated with IQ. Despite identifying a few correlations, they acknowledge that correlations are abundant and often surprising but do not always imply causation 2.
-
AI Misalignment and Misuse: Paul Christiano emphasizes the need to bound the probability of large-scale correlated failures in AI systems. Both misuse of existing AI technologies and potential misalignment of AI pose significant risks. Misuse is currently seen as the more immediate danger, while misalignment could lead to existential risks if AI systems become uncontrollable 3.
These insights highlight the diverse applications and implications of correlations in different fields.
RELATED QUESTIONS-