DEFINITION of 'Pearson Coefficient'
A type of correlation coefficient that represents the relationship between two variables that are measured on the same interval or ratio scale.
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BREAKING DOWN 'Pearson Coefficient'
Numerically, the Pearson coefficient is represented the same way as a correlation coefficient that is used in linear regression; ranging from 1 to +1. A value of +1 is the result of a perfect positive relationship between two or more variables. Conversely, a value of 1 represents a perfect negative relationship. It has been shown that the Pearson coefficient can be deceptively small when it is used with a nonlinear equation.
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