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

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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.


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