DEFINITION of 'Linear Relationship'
A statistical term used to describe the relationship between a variable and a constant. Linear relationships can be expressed in a graphical format where the variable and the constant are connected via a straight line or in a mathematical format where the independent variable is multiplied by the slope coefficient, added by a constant, which determines the dependent variable.
INVESTOPEDIA EXPLAINS 'Linear Relationship'
For example, assume that the independent variable is the size of a house (as measured by square footage), determines the market price of a home (the dependent variable), when it is multiplied by the slope coefficient of 207.65 and is then added to the constant term $10,500. If a home's square footage is 1,250 then the market value the home is $270,062.50. Graphically, and mathematically:
In this example, as the size of the house increases, the market value of the house increases in a linear fashion.

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What does a negative correlation coefficient mean?
A negative correlation coefficient means that, for any two variables X and Y, an increase in X is associated with a decrease ... Read Full Answer >> 
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The correlation coefficient measures the robustness of the relationship between two variables. Pearson's correlation coefficient ... Read Full Answer >> 
What is the difference between a logarithmic price scale and a linear one?
The interpretation of a stock chart can vary among different traders depending on the type of price scale used when viewing ... Read Full Answer >> 
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In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >> 
What are some of the more common types of regressions investors can use?
The most common types of regression an investor can use are linear regressions and multiple linear regressions. Regressions ... Read Full Answer >> 
What types of assets produce negative portfolio variance?
Assets that have a negative correlation with each other produce negative portfolio variance. Variance is one measure of the ... Read Full Answer >>

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