What is a Correlation Coefficient?

By Hemanta Sundaray on 2022-06-16

A correlation coefficient expresses how strongly two variables are related.

Its possible values range from -1.0 to +1.0, but in practice you never find correlations so extreme. The closer a correlation coefficient is to +-1.0, the stronger the relationship between two variables.

A correlation of 0.0 means no relationship. So, you might find a correlation of +0.7 (fairly strong) between, let's say, advertising budget & the total revenue. The higher the advertising budget, the more that gets sold.

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