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Hello Sir. Hope you are doing well.
May I know. Whether Correlation assumes there is always a linear relationship between two variables?Correlation does not have to be linear.
However in all of the arithmetic we do in the exam we always assume there to be linear correlation (the various formulae we use assume the correlation is linear).
Indeed Sir, when it comes to forecasting techniques like High Low and Regression Analysis we assume that.
1. But i encountered a question which said the r = 0.89. So statement was the linear relationship between the two variables are strong.
Shall i say true or false. Because in Kaplan Study Text at one place they have shown it true while in another question that have shown it as false.
2. Sir since we incorporate seasonal variations in case of Time Series Analysis, what means the forecast can be curved rather than being linear. So would the statement mentioned by you above be still valid
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