To start off, I've been reading "Statistics: Principles and Methods" 7th edition by Johnson and Bhattacharyya. I understand the conditional probability formulas and have practiced the examples in the book. What I do not understand is how to apply this to a pair of stocks. For example, let's say stock A going up 2% has a .08 probability, and stock B going up 3% has a .06 probability. What is the conditional probability of stock A going up 2% given that stock B went up 3%?
Here is my guess which I believe is incorrect. P(A|B) = P(AB)/P(B). So (.08+.06)/.06 = 2.33%. Is that right or wrong? Thank you for reading.