What does it imply if a correlation coefficient is close to 1?

A correlation coefficient close to 1 indicates a strong positive relationship between two variables. This means that as one variable increases, the other variable tends to also increase in a consistent manner. In practical terms, a high positive correlation suggests that when changes occur in one variable, corresponding changes in the other variable can be expected almost predictably.

For example, if you are analyzing the relationship between the amount of study time and test scores, a correlation coefficient near 1 would imply that students who study more tend to score higher on tests. This strong positive relationship is crucial for analysts when trying to forecast outcomes based on available metrics.

A value near 0 would imply no relationship at all, and a value close to -1 would indicate a strong negative relationship, where an increase in one variable corresponds with a decrease in the other. A weak relationship, typically represented by a correlation coefficient closer to 0, signifies that there is little to no predictive value between the two variables. Thus, the choice reflecting a strong positive relationship is indeed the correct interpretation of a correlation coefficient close to 1.