Coefficients capture this association numerically and can be computed validly

# Coefficients capture this association numerically and

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variables. Coefficients capture this association numerically and can be computed validly as long as the variances of the two variables and the covariance between them are finite and constant.” Statement 2: “If the correlation between two variables is -1, then if one variable increases by one unit, the other will always decrease by one unit, regardless of the initial value of the first variable.” As the discussion continued, Diaz mentioned that he was trying to determine the relationship between U.S. stock market returns and short-term interest rates. For this, he had calculated the correlation coefficient between annual returns to a U.S. market index and annual interest rates using data of the past twenty years. However, when Thomas reviewed his calculations, he made the following comment: Statement 3: “Your data set includes three observations that can clearly be termed as outliers. Hence, to make sure that the sample correlation is a reliable measure of the true population correlation, you need to recalculate it after removing the effect of the outliers.”