## What is a Perfect correlation?

The perfect correlation exists when two variables change in exactly equal proportion. It is often further classified into two categories.

The perfect correlation exists when two variables change in exactly equal proportion. It is often further classified into two categories.

A zero correlation between any two variables does not mean that there is no relationship at all between them. In fact, it should be interpreted that the 2 variables are not linearly related.

The study of the relationship between only two variables is known as a simple correlation. For example, the relationship between price and demand.

The study of relationships among three or more than three variables simultaneously is called multiple correlations. For example, the study of the relationship between price, demand, tastes, and income of the consumers.

A linear positive correlation between two variables is depicted by a positively sloped straight line graph. If the ratio for change between the two variables is constant or fixed, then the 2 variables are said to be linearly correlated.

A positive correlation between two variables exists when both of them move in the same direction. In other words, if with the increase in one variable, the other also increases,

One of the common examples of negative correlation in economics is the price of a commodity and its quantity demanded. As the price of a commodity rises, its demand falls and vice-versa.

A positive correlation between two variables exists when both of them move in the same direction And the negative correlation between two variables

Based on the nature of the relationship between the two variables, correlation can be broadly categorized into the following three types

Correlation is a statistical tool that measures the quantitative relationship between different variables. It studies the degree and intensity of the connection between the two variables. The relationship between two variables is studied with the help of a statistical tool i.e. ‘Correlation’.