Perfect correlation is that when changes in two related variables are exactly proportional It is of two types.
1. Positive perfect correlation and
2. Negative perfect correlation
There is perfect positive correlation between the two variables if equal proportional changes are the same direction. It is expressed as +1. If equal proportional changes are in the reverse direction then there is negative perfect correlation and it is described as -1.
a. Example of positive perfect correlation
| Price(Rs.) |
1 |
2 |
3 |
4 |
5 |
| Supply(Units) |
10 |
20 |
30 |
40 |
50 |
b. Example of perfect negative correlation
| Price(Rs.) |
1 |
2 |
3 |
4 |
5 |
| Demand(Units) |
50 |
40 |
30 |
20 |
10 |
