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Positive Correlation

Categories: Regulations, Metrics

See: Correlation. This is the, uh...upbeat variety.

When we have two variables that are plotted against each other on a scatterplot and we see a linear-ish pattern running from the lower-left to the upper-right, the two sets of data will have a positive correlation. This positive correlations says that, in general, as one variable increases by a certain amount, the other variable also increase by a certain (but not necessarily equal) amount.

It also holds true that, in general, when one variable decreases by that certain amount, the other variable also decreases by a certain (but not necessarily equal) amount.

Things that are positively correlated? The number of hours we spend watching Futurama...and our performance in online Futurama trivia contests.

The price per barrel of oil and the price per gallon of gasoline.

The time we spend thinking up jokes and the quality of said jokes.

Find other enlightening terms in Shmoop Finance Genius Bar(f)