Natural images are characterized by high correlation between their RGB color components. Most representation and compression techniques reduce the redundancies between color components by transforming the color primaries into a decorrelated color space, such as YIQ or YUV. In this paper a different approach to color information analysis is considered. Since the high correlation of color channels implicitly suggests a localized functional relation between the components, it could be used in an alternative framework by approximating subordinate colors as functions of a base color. This way, only a reduced number of parameters is required for coding the color information. Compression results are presented and compared with JPEG, and the parameters that affect the coding quality are studied and discussed. The results show the advantages of the new correlation-based approach over the YIQ/YUV decorrelation techniques as used in JPEG and related applications.