This coefficient gives an idea of the degree of correlation between the variables.
It takes values between -1 and 1
• If r = 0 then there is no linear correlation between X₁ and X₂ Graphically, the slope is cero
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• If r < 0 then there is a negative association between X₁ and X₂ (i.e. when one variable increases the other one decreases) In a graphic, the slope of the line is negative.
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• If r > 0 then there is a positive association between X₁ and X₂ (i.e. Both variables increase and decrease together)
The slope of this line is decresent, which means that the correlation coefficient is negative.
The points are usually ploted as dots in a coordinate system, the more they align into a line, the closer the coefficient will be to -1 or 1
In this case the ploted dots form a perfect line with negative slope so the value of the correlation coefficient is D. -1
