Question

For the scenario below, explain whether the correlation between random variable 1 and random variable 2 is likely to be 0, positive or negative.

1: Your automobile accident costs for the coming year.

2: The automobile accident costs of a person in another country.

Answer 1

The correlation is the relatinship between two or more variables. It indicates how a variable is correlated and changes accordingly if one changes.

There are two variables. The both are accidental cost but in two different countries. The accidental cost incurred by me is not related with accidental cost of a person wo is living overseas. So, in this two variable are not related. So, correlation will be zero as the changes is one variable does not have an effect on othr variable or vice-versa.