I don't know whether anyone conclusively answered the question as to what the red and blue curves represent in the figure.
The blue curve is the quantum prediction for correlation between measurements of the two particles in a spin-1/2 twin pair EPR experiment. If Alice measures the spin of one particle along axis [itex]a[/itex] and Bob measures the spin of the other particle along axis [itex]b[/itex], then the correlation [itex]E(a,b)[/itex] is the average value, over many trials, of [itex]AB[/itex] where [itex]A[/itex] is [itex]\pm 1[/itex], depending on whether Alice measures spin-up or spin-down, and [itex]B[/itex] is [itex]\pm 1[/itex], depending on whether Bob measures spin-up or spin-down.
The quantum prediction is: [itex]E(a,b) = -cos(\theta)[/itex] where [itex]\theta[/itex] is the angle between [itex]a[/itex] and [itex]b[/itex]. So it's -1 at [itex]\theta = 0[/itex] and 0 at [itex]\theta = 90^o[/itex]
So what's the red line? It's a little bit misleading to call that the classical prediction. It's the prediction of a particular classical model. There are lots of different possible classical models, and they make different predictions. But the specific model that that's a graph for is one describe by Bell in his discussion of EPR. It has the nice feature that [itex]E(a,b) = -1[/itex] when [itex]\theta = 0[/itex] and [itex]E(a,b) = 0[/itex] at [itex]\theta = 90^o[/itex] and [itex]E(a,b) = +1[/itex] at [itex]\theta = 180^o[/itex], just like the quantum predictions. This classical model is the following:
Assume that when a twin pair is produced, there is, attached to the particles, an associated spin vector [itex]\vec{S}[/itex] pointing in a random direction.
Alice then chooses an axis [itex]\vec{a}[/itex] to measure the spin relative to. She gets [itex]A= +1[/itex] if the angle between [itex]\vec{S}[/itex] and [itex]\vec{a}[/itex] is less than 90°. She gets [itex]A = -1[/itex] if the angle is more than 90°.
Bob chooses an axis [itex]\vec{b}[/itex], and gets [itex]B = \mp 1[/itex] depending on whether the angle between [itex]\vec{b}[/itex] and [itex]\vec{S}[/itex] is less than or more than 90°. (The opposite of the rule for Alice.)
With this classical rule, if [itex]\vec{a} = \vec{b}[/itex], (relative angle [itex]\theta = 0[/itex]), they will always get opposite results, for a correlation of [itex]-1[/itex]. If [itex]\vec{a} = -\vec{b}[/itex] (relative angle [itex]\theta = 180^o[/itex]), they will always get the same result, for a correlation of [itex]+1[/itex]. If [itex]\vec{a}[/itex] and [itex]\vec{b}[/itex] are at right angles (relative angle [itex]\theta = 90^o[/itex]), they will get the same result 50% of the time, and opposite results 50% of the time, for a correlation of 0.
So this classical model makes the same predictions as QM for the cases of relative angles of [itex]0^o, 90^o, 180^o[/itex], but makes different predictions for other angles.