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Positive correlation If 2 Parameters are directly proportional (if one increases the other as well increases, if one parameter decreases the other as well decreases) then they are said to have a positive correlation. Example Savings Vs financial security Overtime worked and extra income Salary Vs work satisfaction Increased moisture Vs crop production Perfect positive correlation Perfect positive correlation means that if the first variable moves by some x% then second variable also moves by same amount in the same direction. With the help of one variable we can predict the other variable. Example Length of the square to the perimeter of the square. Radius of the circle to the perimeter of the circle. Over time Hours to Over time Amount Temperature to Pressure Co-relation Negative correlation If 2 Parameters are inversely proportional (if one parameter increases the other decrease or if one parameter decreases the other parameter increases) then they are said to have a negative correlation. Examples Colder the nights in winter and higher the energy bills(gas bill) Higher transportation speed and decreased travel time Increased exercise and fewer medical expenses Higher loan payments and lower total interest amount owed Increased absenteeism and lower overall income Perfect Negative correlation Perfect Negative correlation means that if the first variable moves by say x% then second variable must also move by the same amount in the opposite direction. Nothing more nothing less. With the help of one variable we can predict the other variable. Examples Air Lines Oil Price to Profit Balls left in 50 Over Cricket Match Could there be a situation where it is either -1 or +1 i.e. Perfect Correlation? In theory Yes, its possible (see above examples). In practical its very rare, almost no as there will always be a measurement errors , Instruments uncertainty no matter how accurate your instrument is. Example if you find a perfect square, when you measure length of the square and measure all the lengths for calculating perimeter. You are measuring with say measurement tape there will be always be chance of a measurement error and instrument uncertainty.