A density matrix formulation of classical bipartite correlations is constructed. This leads to an understanding of the appearance of classical statistical correlations intertwined with the quantum correlations as well as a physical underpinning of these correlations. As a byproduct of this analysis, a physical basis of the classical statistical correlations leading to additive entropy in a bipartite system discussed recently by Tsallis et al emerges as inherent classical spin fluctuations. It is found that in this example, the quantum correlations shrink the region of additivity in phase space. PACS numbers 03.67.-a, 03.65.Yz, 05.20.-y If the probabilities of a classical statistical model are regarded as the coefficients of a diagonal density matrix, a question arises as to its quantum features. For example, a bipartite system with classical probabilities, j i p , , and its associated marginal probabilities