The correlation coefficient and the covariance are measures of the extent to which two random variables move together.

Question

Quizplus · Accepted Answer

The correlation coefficient and the covariance both measure the strength and direction of the linear relationship between two variables. The correlation coefficient standardizes the covariance by dividing it by the product of the variables' standard deviations, so it measures the strength of the relationship on a standard scale between -1 and 1. The covariance, on the other hand, measures the strength of the relationship in their original units of measurement.

The Correlation Coefficient and the Covariance Are Measures of the Extent