Question

Properties of Correlation Coefficient.

Answer 1

• The maximum value of correlation coefficient r is 1 and the minimum value is – 1. Thus, – 1 ≤ r ≤ 1.
• Correlation coefficient r (x, y) between variables X and Y and the correlation coefficient r (y, x) between variables Y and X are equal. Thus, r (x, y) = r (y, x).
• The value of r is not changed by the change of origin and scale. This means r (x, y) = r (u, v); where u = \(\frac{x−A}{C_x}\) and v = \(\frac{y−B}{C_y}\); Cx >0, Cy > 0 and A, B, Cx, Cy are constants.
• The value of r is independent of units of measurements of variables X and Y.
• Coefficient correlation r is an absolute measure.