Correlation coefficients range from -1 to +1, indicating the strength of relationships between variables. Investors use correlation coefficients for portfolio diversification to reduce risk.

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J Catalano is a CFP and Registered ...

Correlation coefficients are indicators of the strength of the linear relationship between two different variables, x and y. A linear correlation coefficient that is greater than zero indicates a ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J Catalano is a CFP and Registered ...

You've probably noticed certain things that have a clear relationship with one another. For example, the amount of petrol your car uses increases along with the number of kilometres you drive. Or, if ...

Once the ranks for the two variables are found, we apply the formula for the correlation to the ranks as follows: Both Spearman’s rank and Pearson’s correlation tests share the purpose of assessing ...

What is Pearson correlation test, Pearson product moment correlation or Pearson r? Pearson’s correlation helps us understand the relationship between two quantitative variables when the relationship ...

Correlation vs Regression: Both correlation and regression are two powerful tools of statistics and data analysis used to understand the relationships between variables. However, they serve distinct ...