Question

If you are given the two variables Andrew and Chris and they are following the following two characteristics.

1. If Andrew earn then Chris also earn

2. If Andrew is in loss then Chris loss is unknown

Looking at above two characteristics, which of the following option is the correct for correlation between Andrew and Chris?

None of the mentioned

  

Correlation coefficient is almost equal to 1

  

Correlation coefficient is almost equal to -1

  

Correlation coefficient is almost equal to .5

Answer 1

1. In case if Andrew earn and Chris also earns then Correlation coefficient is almost equal to 1

2. In case if Andrew is in loss for Chris the following cases can occurs

If both Andrew and Chris both are in loss then Correlation coefficient is almost 1

If Andrew is in loss but Chris is in profit the correlation coefficient is almost -1

If Andrew is in loss if Chris is also in loss but we don't the value of loss for Chris but both atmre having loss in this case also we can conclude the correlation coefficient is almost 1