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Correlation Coefficient

Definition

The correlation coefficient is a statistical measure that quantifies the strength and direction of the linear relationship between two variables. It ranges from -1 to 1, where -1 indicates a perfect negative relationship, 0 indicates no relationship, and 1 indicates a perfect positive relationship.

Analogy

Think of the correlation coefficient as a "relationship score" between two variables. Just like how you can rate your compatibility with someone on a scale from -1 (not compatible at all) to 1 (perfectly compatible), the correlation coefficient measures how well two variables "get along."

Related terms

Scatterplot: A scatterplot is a graphical representation of data points plotted on an x-y axis, showing the relationship between two variables.

Outliers: Outliers are extreme values that deviate significantly from other data points in a dataset and can have a strong impact on the correlation coefficient.

Line of Best Fit: The line of best fit is a straight line that represents the overall trend or pattern in a scatterplot and helps visualize the direction and strength of the linear relationship.