A contrary relationship between two variables such that they move in opposite directions. In an inverse correlation with variables A and B, as A increases, B would decrease; as A decreases, B would increase. In statistical terminology, an inverse correlation is denoted by the correlation coefficient r having a value between -1 and 0, with r = -1 indicating perfect inverse correlation.
Also known as negative correlation.
In financial markets, the best example of an inverse correlation is probably the one between the U.S. dollar and gold. As the U.S. dollar depreciates against major currencies, gold is generally perceived to rise, and as the U.S. dollar appreciates, gold declines in price.
Two points need to be kept in mind with regard to negative correlation. First, the existence of negative correlation (or positive correlation, for that matter) does not necessarily imply a causal relationship. Second, the relationship between two variables is not static and will fluctuate over time, which means that they may display an inverse correlation during some periods and a positive correlation during others.
Investment dictionary. Academic. 2012.
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inverse correlation — neigiamoji koreliacija statusas T sritis fizika atitikmenys: angl. inverse correlation; negative correlation vok. negative Korrelation, f rus. отрицательная корреляция, f pranc. corrélation négative, f … Fizikos terminų žodynas
inverse correlation — See correlation … Dictionary of sociology
correlation coefficient — a statistical measure that when squared gives the degree of association between the values of two random variables. Most correlation coefficients are normalized so that they have values between +1 (perfect correlation) and −1 (perfect… … Medical dictionary
corrélation négative — neigiamoji koreliacija statusas T sritis fizika atitikmenys: angl. inverse correlation; negative correlation vok. negative Korrelation, f rus. отрицательная корреляция, f pranc. corrélation négative, f … Fizikos terminų žodynas
inverse — 1 adjective (only before noun) 1 in inverse proportion/relation to getting bigger at the same rate as something else gets smaller, or getting smaller at the same rate as something else gets bigger: Clearly, the amount of money people save… … Longman dictionary of contemporary English
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