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Correlation Coefficients

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Explain the concept of correlation and how to interpret correlation coefficients of 0.3, 0, and -0.95.

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The correlation coefficient takes on values ranging between +1 and -1. The following points are the accepted guidelines for interpreting the correlation coefficient:

0 indicates no linear relationship.
+1 indicates a perfect positive linear relationship: as one variable increases in its values, the other variable also increases in its values via an exact linear rule.
-1 indicates a perfect negative linear relationship: as one variable increases in its values, the other variable decreases in its values via an exact linear rule.
Values between 0 and 0.3 (0 and -0.3) indicate a weak positive (negative) linear relationship via a shaky ...

Solution Summary

The correlation coefficient takes on values ranging between +1 and -1. The following points are the accepted guidelines for interpreting the correlation coefficient:

$2.19
See Also This Related BrainMass Solution

Statistics: least squares, sample correlation coefficient, coefficient of determination

Exhibit 12-1

You are given the following information about y and x.

y x
Dependent Variable Independent Variable
5 15
7 12
9 10
11 7

16. Refer to Exhibit 12-1. The least squares estimate of b1 equals

a. -0.7647

b. -0.13

c. 21.4

d. 16.412

17. Refer to Exhibit 12-1. The least squares estimate of b0
equals

a. -7.647

b. -1.3

c. 21.4

d. 16.41176

18. Refer to Exhibit 12-1. The sample correlation coefficient equals

a. -86.667

b. -0.99705

c. 0.9941

d. 0.99705

19. Refer to Exhibit 12-1. The coefficient of determination equals

a. -0.99705

b. -0.9941

c. 0.9941

d. 0.99705

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