Question

How might squaring a correlation coefficient be useful to understanding the relationship between two variables?

Answer 1

Correlation coefficient is denoted by r

The square of the correlation coefficient r² is also an important representation value

Correlation coefficient takes values from -1 to 1

while square of the correlation coefficient will take value from 0 to 1

It is also called as the coefficient of determination and it provides a useful information on

the fraction of the variation in one variable that may be explained by the other variable.

e.g. r = -0.9, then r² = 0.81.

It implies that the model can explain 81% of the variation in one variable affected by the other variable.