A SAS PROC VARCLUS output shows that a cluster has R-squared with its own component = 0.45 but next-nearest cluster R-squared = 0.48. What does this imply?
Select an answer to reveal the explanation.
Short Explanation
Here's the deal — when a cluster's next-nearest R-squared is higher than its own, the variables are more related to another component, so the cluster is ambiguous. You're seeing a suboptimal structure where variables may be misassigned.
Full Explanation
The ambiguous-cluster interpretation is correct because when a cluster's variables are better explained by another cluster's component (next-nearest R-squared 0.48 > own R-squared 0.45), the 1-R² ratio exceeds 1.0, signaling that the current cluster structure is suboptimal and variables may be misassigned. The well-defined-cluster claim is wrong; the low own R-squared (0.45) and higher next-nearest R-squared indicate poor cohesion. The add-more-variables claim is wrong; adding variables does not fix the misassignment issue. The single-variable-merge claim is wrong; single-variable clusters would have R-squared = 1.0 with their own component.