I have been reading about the physical meaning of exchange-correlation hole and this is what I have found so far: Exchange hole - attributed to the spin of the electrons. Electrons of same spin will not occupy the same orbital because of Pauli Exclusion Principle. This leads to the lowering of density around the electron and hence the lowering of system energy. (This one, I understand.) Correlation hole - electrons of same spin will still avoid each other because of negative charges between electrons. Question: If correlation hole is merely due to the similar negative charges of electrons, shouldn't the classical Coloumb interaction take this into account? In that case, why is there a need for the correlation hole?