Correlation
A number from -1 to 1 that shows how closely two things move together. Zero means no link at all.
In plain English
A correlation of 1 means two things always move together, -1 means they always move in opposite directions, and 0 means there is no link. Correlation also doesn't tell you which one causes the other, or whether either does.
Uncle Gary explains
Ice cream sales and sunburn are strongly correlated. Ice cream doesn't cause sunburn: summer causes both. Uncle Gary has nevertheless banned ice cream.
Why it matters for your money
Our AI's news scores had a correlation of 0.01 with the next day's price move. That is zero wearing a tie.
Where we tested it
- Can AI Predict Stock Prices From the News? We Asked It 599 Times
- Does Volume Confirm the Trend? Sometimes It Contradicts It
- Lesson 7: Ice Cream Doesn't Cause Sunburn
- Lesson 12: Linear Regression: Drawing the Line (and Knowing Where to Stop)
Related terms
All glossary terms. Educational content, not financial advice.