r = 1 : There is perfect positive correlation between two variables. When increase / decrease in the value of one variable results in increase / decrease in the value of the other variable in constant proportion then the value of r is 1. In scatter diagram all points lie on the same straight line going in upward direction from left to right.

r = – 1 : There is perfect negative correlation between two variables. When increase / decrease in the value of the variable results decrease / increase in the value of the other variable in constant proportion, then the value of r is – 1. In scatter diagram all point lie on the same straight line going in downward direction from left to right.

r = 0 : There is no linear correlation between two variables, r = 0 shows absence of correlation and hence two variables are said to be linearly uncorrelated. In scatter diagram all points are randomly scattered. When r = 0 we can say only lack of linear correlation between two variables but there may be non-linear correlation between the variables.