Negative relationship
In statistics, there is a negative relationship or inverse relationship between two variables if higher values of one variable tend to be associated with lower values of the other. A negative relationship between two variables usually implies that the correlation between them is negative, or — what is in some contexts equivalent — that the slope in a corresponding graph is negative. A negative correlation between variables is also called anticorrelation or inverse correlation.
Negative correlation can be seen geometrically when two normalized
An example would be a negative
A particular inverse relationship is called inverse proportionality, and is given by where k > 0 is a
In finance, an inverse correlation between the returns on two different assets enhances the risk-reduction effect of diversifying by holding them both in the same portfolio.
See also
References
- University of Hawaii
- ^ The derivative is negative for positive real numbers x and as well for negative real numbers. Thus the slope is everywhere negative except at the singularity x = 0.
External links
- Michael Palmer Testing for correlation from Oklahoma State University–Stillwater