Question

If the correlation coefficient for the earnings per share, X, and the dividends per share, Y, for companies providing cloud storage is -0.003, then what type of correlation does it represent?

Answer 1

Correlation

We know that Correlation can take values from -1 to 1 where 0 indicates that there is no Correlation or linear relationship between the two variables, -1 indicates perfect negative correlation and 1 indicates perfect positive correlation.

Here the Correlation is -0.003. So statistically there is a very small negative correlation between the two given variables.

[Practically it is very close to 0 and so there hardly exists any linear relationship between X and Y.]