Question

A retail analyst calculates the Pearson correlation coefficient between weekly inventory levels and weekly sales revenue across 52 weeks and obtains a value of -0.82. Based on this result, how should the analyst describe the relationship between the two variables?

Accepted Answer

A strong negative linear relationship: as inventory levels rise, sales revenue tends to fall

Answer

A weak negative linear relationship that is not meaningful for analysis

Answer

A strong positive linear relationship: as inventory levels rise, sales revenue also rises

Answer

No relationship, because correlation coefficients near -1 indicate randomness