What does a correlation coefficient indicate about data?
1 Answer
Nov 3, 2015
Nature of the movement of variation in the given data set.
Explanation:
The correlation coefficient is meaningful only when there is a cause and effect relationship between the two variables X and Y.
Using the formula, for the correlation coefficient, we can obtain a value. But it becomes meaningful only if there is a cause and effect relationship between X and Y.
Once the dependence between the variables is established, a positive correlation coefficient means that both variables tend to move in the same direction.
a negative correlation means the movement is in opposite direction.
