What correlation effects are covered by density functional theory?

The electron density distribution rho(r) generated by a DFT calculation was systematically studied by comparison with a series of reference densities obtained by wavefunction theory (WFT) methods that cover typical electron c orrelation effects. As a sensitive indicator for correlation effects the di pole moment of the CO molecule was used. The analysis reveals that typical LDA and GGA exchange functionals already simulate effects that are actually reminiscent of pair and three-electron correlation effects covered by MP2, MP4, and CCSD(T) in WFT. Correlation functionals contract the density towa rds the bond and the valence region thus taking negative charge out of the van der Waals region. It is shown that these improvements are relevant for the description of van der Waals interactions. Similar to certain correlate d single-determinant WFT methods, BLYP and other GGA functionals underestim ate ionic terms needed for a correct description of polar bonds. This is co mpensated for in hybrid functionals by mixing in HF exchange. The balanced mixing of local and non-local exchange and correlation effects leads to the correct description of polar bonds as in the B3LYP description of the CO m olecule. The density obtained with B3LYP is closer to CCSD and CCSD(T) than to MP2 or MP4, which indicates that the B3LYP hybrid functional mimics tho se pair and three-electron correlation effects, which in WFT are only cover ed by coupled cluster methods.