Which of the following statements is most correct?
A)Perfectly negatively correlated series move exactly together and have a correlation coefficient of -1.0 while perfectly positively correlated series move exactly in opposite directions and have a correlation coefficient of +1.0.
B)Perfectly negatively correlated series move exactly together and have a correlation coefficient of +1.0 while perfectly positively correlated series move exactly in opposite directions and have a correlation coefficient of -1.0.
C)Perfectly positively correlated series move exactly together and have a correlation coefficient of +1.0 while perfectly negatively correlated series move exactly in opposite directions and have a correlation coefficient of -1.0.
D)Perfectly positively correlated series move exactly together and have a correlation coefficient of -1.0 while perfectly positively correlated series move exactly in opposite directions and have a correlation coefficient of +1.0.
E)none of the above

Question

Quizplus · Accepted Answer

The statement "Perfectly positively correlated series move exactly together and have a correlation coefficient of +1.0 while perfectly negatively correlated series move exactly in opposite directions and have a correlation coefficient of -1.0" is the most correct. A correlation coefficient measures the strength and direction of the relationship between two variables, ranging from -1.0 (perfect negative correlation) to +1.0 (perfect positive correlation). If two variables move exactly together, they are considered perfectly positively correlated with a correlation coefficient of +1.0. If two variables move exactly in opposite directions, they are considered perfectly negatively correlated with a correlation coefficient of -1.0. The first statement in choice A is incorrect because perfectly negatively correlated series move exactly in opposite directions, not exactly together. The second statement in choice A is correct for perfectly positively correlated series, but not for negatively correlated series. The statements in choices B and D are incorrect because they have the correlation coefficients mixed up for perfectly positively/negatively correlated series.

Which of the Following Statements Is Most Correct