Negative Correlation Assignment Help: Definition

Negative Correlation

A negative correlation has a significant role to play for students pursuing any financial course. The topic has a substantial impact on finance. You will be unable to understand and suggest to your clients the right investment opportunities. Many students aspire to be good portfolio manager. You need to understand this topic to help your client in managing his/her portfolio correctly. The following parts will help you know what negative correlation is and its different aspects. These will help you learn more about the topic and better understand its impact in the professional field.

What is a Negative Correlation?

You will learn about variables in your academic courses. It is essential to understand the meaning of variables to learn negative correlation research. The term negative correlation implies a relation between two variables in a negative way. The quickest way to know this is by looking at the two variables properly. The variables act entirely different in this case. As one variable increases, the other decreases. When you come across such a phenomenon, you can call the relation between those variables negative, and it happens to be the correct instance of negative correlation. It occupies a significant part of statistics. You will need a sound understanding of this term to get through with statistical problems. You need to learn this topic in your primary academic courses. It is important to learn basics of statistics for future benefits. This factor comes into play when you have to construct diversified portfolios. The negative correlation between two variables happens when two variables move in the opposite direction. It will help you identify the correlation quickly.

Once you learn about the basics, it is essential to understand when you can call this a strong negative correlation. The next section will help you learn about it.

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What is Strong Negative Correlation?

As mentioned earlier, the variables play a significant role in calculating the negative correlation. The relation between the variables determines the strength of such a correlation. It is essential to understand that every time the variables do not behave the same way. At times, both the variables tend moving up as a response to each other. Such cases are not considered to have a strong negative correlation. On the other hand, you will come across instances where the variables respond differently in response to one another. The case where one variable goes down in response to the other is considered a strong negative correlation. This flow indicates a strong relationship between the two variables. It is essential to understand this relationship when you are dealing with shares or stocks. The behaviour of the market concerning different shares indicates a strong negative correlation.

Now that you know the meaning of negative correlation and how to identify a strong one, it is important to learn about the negative correlation coefficients. Follow the discussion in the next section to get an understanding of the same.

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What is Negative Correlation Coefficients?

You can understand the impact and how to identify a negative correlation. But, it is equally important to understand the meaning of coefficients. If you have learnt the basics of statistics, you must come across the term coefficients many times. The coefficients are generally used in statistics to explain a pattern and the relation between the two variables. Similarly, it is essential to build up a connection between the two variables in the case of negative correlation. The whole calculation depends on the way these variables are related. You will be unable to identify a negative correlation if there are no coefficients. The increase in one variable must result in the decrease of the other. The negative correlation coefficients are also known as inverse correlation. The relationship between the two variables is generally presented in a graph. It is easier to plot the points in the graph and explain the phenomenon.

The understanding of any topic is not clear until the practical use of the same. You can find many examples of negative correlation on MyAssignmenthelp.com. To understand this better, here are some examples of negative correlation.

Examples of Negative Correlation

Learning any topic is never complete until you use that knowledge practically. Your instructor will share many examples to help you learn the topic correctly. Examples help in understanding any lesson better. You will be able to relate the term to the practical world and understand the impact. The following are few examples of negative correlation. Each has two variables that act opposite to each other.

A student who is absent most of the days will see a decrease in his/her grades.
The cost of an air conditioner decreases when the weather gets colder.
If a train increases its speed, the time to reach its destination decreases.
A chicken’s ability to produce eggs decreases with its age.
If your car tyre has more air, the usage of gas per mile decreases.
More exercise will result in loss of weight for an individual.
The increase in the slope of a hill will decrease the speed of the walker.
Running more will decrease the chances of cardiovascular problems.

All the above examples have two variables that act exactly opposite to each other. If you go through the examples properly, you will understand how the increase in one variable results in the decrease of the other. Another vital thing to understand is when two variables have a negative correlation? The following section will help you understand the same.

When Two Variables have a Negative Correlation?

The above examples will help you learn negative correlation properly. You can see that the way the two variables respond to each other. A negative correlation can only happen when the relation between the two variables are opposite. The increase in one variable must result in the decrease of the other and vice versa. So, you need to understand the impact of each variable while identifying or calculating the negative correlation. The topic cannot be understood merely by learning the definition or going through the examples. You need to have the correct understanding of the impact it has on any report. There are many instances, such as the ones stated above, which will help you learn the lesson correctly. You need to be aware of the problem, find out the two variables, and understand the impact of each.

MyAssignmenthelp.com has experts who can help you learn more about the subject. You can take the necessary study help from them and learn the topic properly. Also, it is essential to be attentive in class to understand each lesson well. Many students fail to understand these topics and face many problems while attempting the questions. The topic is not complex if you know the basics.