DEFINITION of 'Correlation Coefficient'
A measure that determines the degree to which two variable's movements are associated.
The correlation coefficient is calculated as:
INVESTOPEDIA EXPLAINS 'Correlation Coefficient'
The correlation coefficient will vary from 1 to +1. A 1 indicates perfect negative correlation, and +1 indicates perfect positive correlation.
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RELATED FAQS

Can the correlation coefficient be used to measure dependence?
The correlation coefficient can be used to measure the linear dependence between two random variables. The most common correlation ... Read Full Answer >> 
What does it mean if the correlation coefficient is positive, negative, or zero?
The correlation coefficient measures the robustness of the relationship between two variables. Pearson's correlation coefficient ... Read Full Answer >> 
The covariance between Stock A and Stock Z is 10.32, while the correlation coefficient ...
The covariance between Stock A and Stock Z is 10.32, while the correlation coefficient between the two stocks is 0.35. ... Read Full Answer >> 
What is the correlation between American stock prices and the value of the U.S. dollar?
The correlation between any two variables (or sets of variables) summarizes a relationship, whether or not there is any realworld ... Read Full Answer >> 
What is the difference between a simple random sample and a stratified random sample?
Simple random samples and stratified random samples differ in how the sample is drawn from the overall population of data. ... Read Full Answer >> 
What are the advantages and disadvantages of using systematic sampling?
As a statistical sampling method, systematic sampling is simpler and more straightforward than random sampling. It can also ... Read Full Answer >>
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