Correlation coefficients range from -1 to +1, indicating the strength of relationships between variables. Investors use correlation coefficients for portfolio diversification to reduce risk.

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Thomas J Catalano is a CFP and Registered ...

What is Pearson correlation test, Pearson product moment correlation or Pearson r? Pearson’s correlation helps us understand the relationship between two quantitative variables when the relationship ...

James Chen, CMT is an expert trader, investment adviser, and global market strategist. Thomas J. Brock is a CFA and CPA with more than 20 years of experience in various areas including investing, ...

What Is the Correlation Coefficient? The correlation coefficient is a metric that measures the strength and direction of a relationship between two securities or variables, such as a stock and a ...

You've probably noticed certain things that have a clear relationship with one another. For example, the amount of petrol your car uses increases along with the number of kilometres you drive. Or, if ...