## Correlation Coefficient

## The Linear Correlation Coefficient measures the strength of the relationship between the paired

xandyvalues in a sample. The equation is as follows:

## How do we interpret

r? The value ofrmust always fall between 1 and -1. A value closer to 1 indicates a strong positive relationship, while a value closer to -1 indicates a strong negative realtionship. Values with no significant linear correlation possess anrcloser to 0.We can deduce that the variables from the previous page would produce an

rextremely close to 1. But hardly is the conclusion so obvious. how do we decide whether a significant relationship exists between variables when confronted with anrthat does not closely approach any of the extremes?We do this by conducting a hypothesis test, which if you remember is also known as a test of significance.

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