Question

The covariance and correlation coefficient are measures that quantify the non-linear relationship between two variables.

T/F

Answer 1

False.It is actually the opposite . Covariance and correlation coefficient are said to be the perfect measures that quantify the linear relationship between two variables.

Covariance measures how two variables vary with respect to each other.

Negative Covariance means when X is big,Y tends to be small and when X is small, Y tends to be big.

Zero Covariance means no linear relationship between X and Y.

Positive Covariance means when X is big,Y tends to be big; when X is small, Y tends to be small.

Coefficient of Correlation (ρ) measures strength of linear relationship between X and Y.

Coefficient of Correlation is always between -1 and 1.

Value close to -1 implies strong negative linear relationship between x and y.

Value close to 1 implies strong positive linear relationship between x and y.

Value close to 0 implies no linear relationship between x and y.

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