What Is the Correlation Coefficient? The correlation coefficient is a metric that measures the strength and direction of a relationship between two securities or variables, such as a stock and a ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

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

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 ...

This article deals with the use and misuse of the correlation coefficient when the dependent variable is of a dichotomous 0,1 nature. It focuses particularly on problems relating to curvilinearity and ...

Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School ...