The formula for Pearson’s correlation coefficient, r, relates to how closely a line of best fit, or how well a linear regression, predicts the relationship between the two variables. It is presented ...

In physics and chemistry, a correlation coefficient should be lower than -0.9 or higher than 0.9 for the correlation to be considered meaningful, while in social sciences the threshold could be as ...

The correlation coefficient is a number between 1 and -1. ... You can do this simple exercise to test for correlation between stocks and anything else that has decent datapoints.

If two assets have an expected return correlation of 1.0, that means they are perfectly correlated. If one gains 5%, the other gains 5%. If one drops 10%, so does the other.

This is reflected in the results of a correlation test. The correlation coefficients of Shell versus WTI, Brent, and Henry Hub natural gas prices stand at 0.83, 0.79, and 0.60, respectively.