Meaning of CORRELATION in English


1. In portfolio theory , the coefficient of correlation is used to know the extent to which two series are relative.

Note: the correlation may only range between +1 and -1 ; when approaching +1, two series are positive correlated; hence if a change in one of the series, there is a high likelihood of a change of the other series in the same direction. when approaching -1, two series are negatively correlated, they will move in exactly opposite direction. when approaching 0, no relationship exits between the two series.

2. Covariance that is scaled so that values range from -1, when variables vary opposite of each other,

to 1 when they vary together.

See also covariance.

Sean Woo's Finance, GIS and real estate English glossary.      Английский глоссарий по ГИС(Географическая информационная система) и недвижимости Sean Woo's Finance.