The correlation values are shrunk towards zero, depending on the number of ratings the estimate is based on. Otherwise, we would give too much weight to similarities estimated from just a few examples.
http://en.wikipedia.org/wiki/Pearson_correlation
We apply shrinkage as in formula (5.16) of chapter 5 of the Recommender Systems Handbook. Note that the shrinkage formula has changed betweem the two publications. It is now based on the assumption that the true correlations are normally distributed; the shrunk estimate is the posterior mean of the empirical estimate.
Literature: