How do you determine the correlation coefficient?

Answer 1

The correlation coefficient, typically represented as Pearson's r, measures the strength and direction of the linear relationship between two variables. To determine it, you first calculate the covariance of the variables and then divide that by the product of their standard deviations. The formula is ( r = \frac{cov(X, Y)}{σ_X σ_Y} ). The resulting value ranges from -1 to 1, where -1 indicates a perfect negative correlation, 1 indicates a perfect positive correlation, and 0 indicates no correlation.