Applies to: @RISK 4 and Up

Message:

"Warning
The correlation matrix at ... is not self-consistent. @RISK can generate the closest self-consistent matrix. OK generates a corrected matrix and continues, Cancel stops the simulation."

Solutions:

1. If you have @RISK 5.5 or higher

   1. see How @RISK Adjusts an Invalid Correlation Matrix for information on using an adjustment weights matrix.

   2. see How and Why to Switch from RiskDepC to RiskCorrmat.
      1. The technique in that article will lead @RISK to preserve your specified correlations to the extent possible, even if the matrix is not self-consistent.

2. If you have @RISK 5.0 or older, or want to adjust the matrix manually

   1. see How @RISK Tests a Correlation Matrix for Validity

3. If the location in the message is "(In)Depc_matrix_sourcing"

   1. You're using RiskDepC and RiskIndepC.

      1. At the start of simulation, @RISK builds a correlation matrix from those functions, but assigns zero to correlations among the dependent variables

      2. See Correlation Matrix Equivalent to RiskIndepC and RiskDepC in the attached workbook.

         1. It's not unusual for that matrix to be inconsistent, as in Example 1 in the workbook.

         2. If you get the above message and click OK, the simulated correlations may be very different from what you specified.

         3. See Simulated Correlations if You Click OK in the attached workbook.

         4. @RISK leaves the matrix it used in CORRMAT.MTX in your temp folder, but you can see the problem by looking at the simulated correlations.

Attachments:
KB1130_Why_Not_to_Use_RiskDepC.xlsx