Definition of Negative correlation:
Negative correlation is a relationship between two variables in which one variable increases as the other decreases, and vice versa. In statistics, a perfect negative correlation is represented by the value -1, a 0 indicates no correlation, and a +1 indicates a perfect positive correlation. A perfect negative correlation means the relationship that exists between two variables is negative 100% of the time.
Negative correlation or inverse correlation is a relationship between two variables whereby they move in opposite directions. If variables X and Y have a negative correlation (or are negatively correlated), as X increases in value, Y will decrease; similarly, if X decreases in value, Y will increase. The degree to which one variable moves in relation to the other is measured by the correlation coefficient, which quantifies the strength of the correlation between two variables.
How to use Negative correlation in a sentence?
- Negative correlation or inverse correlation is a relationship between two variables whereby they move in opposite directions. This relationship is measured by the correlation coefficient "r", while the square of this figure "R-squared" indicates the degree to which variation in one variable is related to the other.
- Correlation between two variables can vary widely over time. Stocks and bonds generally have a negative correlation, but in he decade to 2018, their correlation has ranged from -0.8 to 0.2.
- Negative correlation is a key concept in portfolio construction, as it enables the creation of diversified portfolios that can better withstand portfolio volatility and smooth out returns.
Meaning of Negative correlation & Negative correlation Definition