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.

Nonlinearity
A relationship which cannot be explained as a linear combination ... 
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A statistical technique to determine the line of best fit for ... 
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A statistical measure that attempts to determine the strength ... 
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A line formed using regression analysis that summarizes a particular ... 
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A measure of the volatility, or systematic risk, of a security ...

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 >> 
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 >> 
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 >> 
What is the variance/covariance matrix or parametric method in Value at Risk (VaR)?
The parametric method, also known as the variancecovariance method, is a risk management technique for calculating the value ... Read Full Answer >> 
What is backtesting in Value at Risk (VaR)?
The value at risk is a statistical risk management technique that monitors and quantifies the risk level associated with ... Read Full Answer >> 
How much variance should an investor have in an indexed fund?
An investor should have as much variance in an indexed fund as he is comfortable with. Variance is the measure of the spread ... Read Full Answer >>

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