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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Correlation
Sir is it true that even if r=1 ,it does not necessarily mean that two variables have a linear relationship?
A correlation coefficient of 1 indicates a perfect positive linear relationship, where the variables increase or decrease together in a straight line.
However, it is possible for two variables to have a nonlinear relationship even when the correlation coefficient is 1. In such cases, the relationship may follow a curved or non-linear pattern. Therefore, the correlation coefficient alone cannot determine the nature of the relationship between variables.