Loss is the amount of packet loss that will happen and require the sending server to resend the packets. Some packet loss is expected on residential settings as well as corporate connections. Do not set this too high or else it will be easily fingerprintable. A recommended value is leaving it as default or a maximum of 2 (which would be 2%)
Correlation is how much the packet loss will be grouped together. With 0 correlation it will be random whereas higher correlation will group it together.