What are the properties of a correlation? What is a “negative” relation and what is a “positive” relation?

What are the properties of a correlation? What is a “negative” relation and what is a “positive” relation? Give examples of each using real variables.

Expert Solution

Properties of Correlation Coefficient : It is denoted by r

The Correlation coefficient lies between -1 and 1
Correlation coefficient is independent of change of origin and scale
The Correlation coefficient is a unit free quantity
The Correlation coefficient is the geometric mean of two regression coefficient

When the value of Correlation coefficient is less than 0, it is called as negative Correlation coefficient.

Example The price and demand of a commodity.

As the price increases the demand of a particular commodity decreases

When the value of Correlation coefficient is greater than 0, it is called as positive Correlation coefficient.

Example : The height and weight of a group of persons

As the height increases, the weight is also increases.

orchestra answered 2 years ago

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