Define correlation coefficient for two variables is -1, Financial Management

Assignment Help:

What does it mean when 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, denoted by 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 much more the two variables will tend to move along with each other at similar time.  The closer r is to -1.0, the much more the two variables will tend to move opposite each other at similar time.  An r value of zero points out that the variables’ values aren't related at all.  This is termed as statistical independence.


Related Discussions:- Define correlation coefficient for two variables is -1

Based on Anthony''s Orchard financial data, Question #1: Review the Anthon...

Question #1: Review the Anthony’s Orchard case study in the unit resources. Consider the following assumptions: • The company, according to Anthony’s Orchard Strategic Plan, is h

Explain the factors affecting the choice of a minimum cash, Explain the fac...

Explain the factors affecting the choice of a minimum cash balance amount. The minimum cash balance amount is defined by how easy it is to raise funds when required, how expected

Explain the financial desirability of burley plc, BURLEY PLC Financial...

BURLEY PLC Financial desirability In a real-terms analysis the real rate of return necessary by shareholders has to be used. This is found as follows 1 nominal rate/1 i

Case study, Suggestion regarding Credit limit. Should it be approved or not...

Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

Types of investment decisions, Q. Types of investment decisions? (1) Sh...

Q. Types of investment decisions? (1) Short-term investment decisions: - This kind of investment decisions related to the short-term assets. These decisions are as well called

Replacement Theory, How is the failure Table for assets that fail suddenly ...

How is the failure Table for assets that fail suddenly constructed?

State about the investigate of competition directorate, State about the inv...

State about the investigate of Competition Directorate Competition Directorate will generally investigate the below areas: (i)  Mergers and takeovers This is when larg

Determine the weighted average cost of capital, To evaluate a company using...

To evaluate a company using enterprise discounted cash flow (DCF), we discount free cash flow by the weighted average cost of capital (WACC). The weighted average cost of capital r

Difference between mortgage bond and a debenture, Difference between mortga...

Difference between mortgage bond and a debenture? A mortgage bond is a secured bond whereas a debenture is an unsecured bond.

Define pro forma financial statements and cash budget, What is the differen...

What is the difference among pro forma financial statements and a cash budget?  Explain why pro forma financial statements are not employed to forecast cash needs. Pro forma inco

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd