DEFINITION of 'Positive Correlation '
A relationship between two variables in which both variables move in tandem. A positive correlation exists when as one variable decreases, the other variable also decreases and vice versa. In statistics, a perfect positive correlation is represented by the value +1.00, while a 0.00 indicates no correlation and a 1.00 indicates a perfect negative correlation.
VIDEO
BREAKING DOWN 'Positive Correlation '
Here are a few simple examples of a positive correlation: The more money I save, the more financially secure I feel. The longer I invest, the more compound interest I earn. The less time I spend marketing my business, the fewer new clients I acquire. The more years of education I complete, the higher my earning potential.
A perfect positive correlation means that 100% of the time, the relationship that appears to exist between two variables is positive. It is also possible for two variables to be positively correlated in some, but not all, cases.

Inverse Correlation
A contrary relationship between two variables such that they ... 
Negative Correlation
A relationship between two variables in which one variable increases ... 
Correlation Coefficient
A measure that determines the degree to which two variable's ... 
Correlation
In the world of finance, a statistical measure of how two securities ... 
Covariance
A measure of the degree to which returns on two risky assets ... 
CrossCorrelation
A statistical measure timing the movements and proximity of alignment ...

Investing
Correlation
In the world of finance, correlation is a statistical measure of how two securities move in relation to each other. 
Forex Education
Using Currency Correlations To Your Advantage
Knowing the relationships between pairs can help control risk exposure and maximize profits. 
Fundamental Analysis
Using Decision Trees In Finance
A decision tree provides a comprehensive framework to review the alternative scenarios and consequences a decision may lead to. 
Economics
Understanding Tragedy of the Commons
The tragedy of the commons describes an economic problem in which individuals try to reap the greatest benefits from a given resource. 
Fundamental Analysis
Return on Investment (ROI) Vs. Internal Rate of Return (IRR)
Read about the similarities and differences between an investment's internal rate of return (IRR) and its return on investment (ROI). 
Economics
Current Probability of Donald Trump as President
Predict the current odds of a Donald Trump presidency, and understand the factors that have kept him on top and the looming challenges he faces. 
Investing Basics
Understanding the Random Walk Theory
The random walk theory states stock prices are independent of other factors, so their past movements cannot predict their future. 
Investing Basics
A Simplified Approach To Calculating Volatility
Volatility is sometimes greater than anticipated, but the way it’s measured can compound the problems that occur when it’s unexpected. 
Investing Basics
Why Blue Chip Stocks Are Key to Buyand Hold Investing
Several blue chip stocks have proven that buyandhold investing still works, even after the huge declines of the Great Recession. 
Mutual Funds & ETFs
Are Your ETFs Too Risky? Learn How to Evaluate Them
Learn how to identify ETFs with greater risk and volatility. See why some investors include higher volatility ETFs in pursuit of greater returns.

What pricetoearnings ratio is average in the utilities sector?
As of December, 2014, the average pricetoearnings (P/E) ratio for the utilities sector is approximately 23, which is considerably ... Read Full Answer >> 
What are some examples of positive correlation in economics?
Positive correlation exists when two variables move in the same direction. A basic example of positive correlation is height ... Read Full Answer >> 
What is the difference between positive correlation and inverse correlation?
In the field of statistics, positive correlation describes the relationship between two variables which change together, ... Read Full Answer >> 
How do I find positive correlation in the stock market?
Positive correlation refers to a statistical relationship in which two variables generally move in the same direction together. ... 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 >> 
Are oil prices and interest rates correlated?
Yes. No. Maybe. Definitely. There's no easy answer to this question. While many theories abound, the reality is that oil ... 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 >> 
Is there a correlation between inflation and house prices?
There is a correlation between inflation and house prices  in fact there are correlations between inflation and any good ... Read Full Answer >> 
What is the relationship between oil prices and inflation?
The price of oil and inflation are often seen as being connected in a cause and effect relationship. As oil prices move up ... Read Full Answer >>