--%>

What is means of correlation coefficient for two variables

What does this mean while we say that the correlation coefficient for two variables is -1? What does it mean if this value were zero? What does it mean if it were +1?
Correlation is calculated by the correlation coefficient, represented through the letter r. The correlation coefficient can take on values among +1.0 (perfect positive correlation) to -1.0 (perfect negative correlation).  The closer r is to +1.0, the more the two variables will tend to move along with each other at the similar time.  The closer r is to -1.0, the more the two variables will tend to move opposite each other at the similar time.  An r value of zero denotes that the variables’ values aren't associated at all.  It is known as statistical independence.

   Related Questions in Finance Basics

  • Q : Near-term policy Normal 0 false false

    Normal 0 false false

  • Q : What is Personal Services Personal

    Personal Services: It is a category of expenditure that comprises such objects of expenditures as the payment of wages and salaries of state employees and employee advantages, comprising the state's contribution to the Public Employees' Retirement Fun

  • Q : Define Trigger Trigger : An event which

    Trigger: An event which causes an action or actions. The triggers can be active (like pressing the update key to validate input to a database) or passive (like a tickler file to repeat of an activity). For illustration, budget "trigger" mechanisms hav

  • Q : Expected rate of return Normal 0 false

    Normal 0 false false

  • Q : Absolute and relative sizes of the

    Normal 0 false false

  • Q : Explain the basic goal of a business

    Normal 0 false false

  • Q : Explain Fiscal Committees Fiscal

    Fiscal Committees: The committees of members in every house of the Legislature which review the fiscal impact of proposed legislation, comprising the Budget Bill. Presently, the fiscal committees comprise the Senate Budget and Fiscal

  • Q : Pros and cons of commercial paper

    Describe pros and cons of commercial paper associated to bank loans for a company seeking short-term financing? Usually commercial paper is a cheaper source of short-term financing for a firm, compared to bank loans. Also, a larger amount of fu

  • Q : What is Victim Compensation and

    Victim Compensation and Government Claims Board, California: It is an administrative body in state government exercising quasi-judicial powers (that is, power to make rules and regulations) to set up an orderly procedure by which the Legislature will

  • Q : Can a corporation contain too much

    Can a corporation contain too much working capital? Describe. A firm can contain too much working capital if this is losing the chance to invest in high returning fixed assets and if this goes beyond the amount of working capital required for r