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Econometrics

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Interpretation of Correlation Statistics (Tag Set Error)

EMETRC-Z4XUGE

Suppose you calculate a correlation statistic $\rho = 1.3$.

How would you interpret this result?

A

This is a large, positive correlation implying that there is a very strong relationship between the two random variables.

B

It is a statistically insignificant correlation, implying that there is no relationship between the two random variables.

C

The correlation statistic is a random variable that is distributed $\rho \sim N(0,1)$

D

The calculated correlation statistic is not feasible.

E

The calculated correlation statistic is only feasible when the number of observations is large.