What does it mean if Pearson correlation is negative?
Similarly, it is asked, what does a negative Pearson correlation coefficient mean?
A negative (inverse) correlation occurs when the correlation coefficient is less than 0 and indicates that both variables move in the opposite direction. In short, any reading between 0 and -1 means that the two securities move in opposite directions.
Additionally, can Pearson's r be negative? Pearson's r can range from -1 to 1. An r of -1 indicates a perfect negative linear relationship between variables, an r of 0 indicates no linear relationship between variables, and an r of 1 indicates a perfect positive linear relationship between variables. A perfect negative linear relationship, r = -1.
Correspondingly, what does negative correlation mean?
Negative correlation is a relationship between two variables in which one variable increases as the other decreases, and vice versa. In statistics, a perfect negative correlation is represented by the value -1, a 0 indicates no correlation, and a +1 indicates a perfect positive correlation.
How do you know if a correlation is positive or negative?
A positive correlation coefficient means that as the value of one variable increases, the value of the other variable increases; as one decreases the other decreases. A negative correlation coefficient indicates that as one variable increases, the other decreases, and vice-versa.