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

Bond-equivalent yield, Normally, the cash flows from mortgage backed ...

Normally, the cash flows from mortgage backed and assets-backed securities are obtained on monthly basis. Therefore, the yield calculated would be on a monthly ba

State about the quick ratio - position ratios, State about the Quick ratio ...

State about the Quick ratio or acid test Quick ratio = Current assets less inventories /Current liabilities(times) This  ratio  measures  immediate  solvency  of  a  busin

Solution to shareholders versus managers conflict, Solutions to this Confli...

Solutions to this Conflict In common, to make sure that managers act to the best interest of shareholders, the firm will: (a) Acquire Agency Costs in the form of:

Scope of finance functions, SCOPE OF FINANCE FUNCTIONS The functions of...

SCOPE OF FINANCE FUNCTIONS The functions of Financial Manager can generally be sub-divided into two: The Routine functions and the Managerial Functions. Managerial Finance F

Working of australian securities and investment commission, Working of ASIC...

Working of ASIC ASIC as an independent government body enforces and regulates company and financial services laws to protect consumers, investors and creditors. It keeps the pu

Accounting or average rate of return , I need a report on Accounting or Ave...

I need a report on Accounting or Average Rate of Return. Can you please assist me for Accounting or Average Rate of Return report for about 2500 words?

Add or Drop Analysis, Lakespring Retirement Village is home to senior citiz...

Lakespring Retirement Village is home to senior citizens who are fairly independent but need assistance with basic health care and occasional meals. Jill Thompson, a licensed beaut

What is post-acquisition integration, Post-acquisition integration In o...

Post-acquisition integration In order to have constructive discussions between organisations, it's strongly recommended that all participants in process adopt a set of ground r

Foreign exchange market, 'Foreign Exchange Market': Definition of 'For...

'Foreign Exchange Market': Definition of 'Foreign Exchange Market' The markets, in which participants are able to sell, buy exchange and speculate on currencies.  Foreign e

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