Correlation coefficients range from -1 to +1, indicating the strength of relationships between variables. Investors use correlation coefficients for portfolio diversification to reduce risk.

Andriy Blokhin has 5+ years of professional experience in public accounting, personal investing, and as a senior auditor with Ernst & Young. Thomas J Catalano is a CFP and Registered Investment ...

In the first case, there is a strong upward-sloping relationship between X and Y; in the second case, no apparent relationship; in the third case, a strong downward-sloping relationship. Note the ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Yarilet Perez is an experienced multimedia ...

Last month we explored how to model a simple relationship between two variables, such as the dependence of weight on height 1. In the more realistic scenario of dependence on several variables, we can ...

Jonathan Borwein (Jon) receives funding from the ARC. Michael Rose does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, ...