Define correlation.

Correlation refers to a statistical measure that indicates the extent and direction of a relationship between two variables. When two variables are correlated, changes in one variable are associated with changes in another variable. This relationship can either be positive (as one variable increases, the other also tends to increase) or negative (as one variable increases, the other tends to decrease).

Understanding correlation is crucial in statistics because it allows researchers to identify and quantify the degree of association between different data points. For instance, in a study examining the relationship between hours studied and exam scores, a positive correlation would suggest that students who study more tend to achieve higher scores.

The other options, while related to statistics, do not accurately define correlation. Predicting future data points pertains more to regression analysis than to correlation itself. The difference between two averages is a concept involved in descriptive statistics but does not capture the essence of correlation. Lastly, a graphical representation of data points refers to scatter plots and other forms of visual data representation, which can illustrate correlation but do not define it.