Correlation Pitfalls With ChatGPT: Would You Fall for Them?

Abstract

This paper presents an intellectual exchange with ChatGPT, an artificial intelligence chatbot, about correlation pitfalls in risk management. The purpose of this discussion is to evaluate ChatGPT’s understanding of these pitfalls and to offer readers an engaging alternative for learning about them. Our findings indicate that ChatGPT possesses solid knowledge of basic and mostly non-technical aspects of the topic, but falls short in terms of the mathematical goring needed to avoid certain pitfalls or completely comprehend the underlying concepts. Nonetheless, we suggest ways in which ChatGPT can be utilized to enhance the learning process.

Keywords: ChatGPT, correlation, dependence, pitfalls

JEL Classification: C45, G32, D83