In the above example, Apple and the S&P 500 have a correlation coefficient of 0.73817, which indicates a strong relationship between the two over 90 days of data.

Negative Correlation and the Correlation Coefficient The correlation coefficient is how you'll typically get information about the correlations (negative or otherwise) between different things.

For example, when two stocks move in the same direction, the correlation coefficient is positive. Conversely, when two stocks move in opposite directions, the correlation coefficient is negative.

The formula for Pearson’s correlation coefficient, r, relates to how closely a line of best fit, or how well a linear regression, predicts the relationship between the two variables. It is presented ...

Negative Correlation: How it Works, Examples And FAQ. Story by Elvis Picardo • 1y. Understanding a Key Tool in Diversifying Your Portfolio. ... In a line graph, you would see a downward slope.

For example, folks commonly believe high oil prices are a strain on spending and therefore are bad for the economy and stocks, ... The correlation coefficient is a number between 1 and -1.

There are two key assumptions for the Spearman’s rank correlation coefficient: The data should be on the ordinal or continuous scale. An example of an ordinal variable is a survey question that ranks ...

The correlation coefficients of Chevron versus WTI, Brent, and Henry Hub natural gas prices stand at 0.67, 0.57, and 0.49, respectively.