Certified Supply Chain Professional (CSCP) Practice Exam

What does a correlation value of 0 signify in statistical terms?

1. Perfect positive correlation

2. No correlation

3. Perfect negative correlation

4. High variability

The correct answer is: No correlation

A correlation value of 0 indicates that there is no linear relationship between the two variables being analyzed. In statistical terms, this means that changes in one variable do not predict changes in the other; they are completely independent of one another. For example, if you were to graph the data points corresponding to these two variables, you would not see any discernible upward or downward trend. The points would be scattered randomly across the graph, suggesting that no systematic connection exists between the two. In contrast, a perfect positive correlation, indicated by a value of 1, demonstrates that when one variable increases, the other does as well. A perfect negative correlation, indicated by a value of -1, shows an inverse relationship where one variable increases as the other decreases. High variability is not directly related to correlation values but refers to the extent to which data points differ from the mean. Thus, a correlation value of 0 serves as a crucial point in understanding relationships between variables, confirming their independence in a statistical analysis context.