Quick Definition

Positive correlation occurs when two variables move in the same direction, meaning as one variable increases, the other also increases.

Examples

• 1Stock prices and economic growth often exhibit positive correlation; as the economy grows, many stocks tend to increase in value.
• 2Interest rates and bond yields are positively correlated; when interest rates rise, bond yields typically also rise.
• 3Consumer confidence and consumer spending show positive correlation; higher consumer confidence often leads to increased spending.

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