Scribd
Upload
21 views

Correlation

This document discusses correlation analysis and different methods for studying correlation. Correlation is a measure of the relationship between two variables, with a coefficient between -1 and 1. Scatter diagrams and Karl Pearson's coefficient of correlation are two common methods. Pearson's coefficient provides a precise measure of both the direction and strength of the linear relationship between variables.

Uploaded by

Mayank
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
21 views

Correlation

This document discusses correlation analysis and different methods for studying correlation. Correlation is a measure of the relationship between two variables, with a coefficient between -1 and 1. Scatter diagrams and Karl Pearson's coefficient of correlation are two common methods. Pearson's coefficient provides a precise measure of both the direction and strength of the linear relationship between variables.

Uploaded by

Mayank
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 13

Co-relation Analysis

NILAY KUMAR NANDI


Ph.D Scholar
[email protected]
(AIP) Amity University, Noida
CO-RELATION ANALYSIS
Correlation is an analysis used to determine the relationship
between two or more variables.

 The measure of correlation is called is called coefficient of


correlation and is denoted by the symbol ‘r’.

 It helps us to find the degree or extent of quantitative


relationship between two variables.

 It does not say anything about the cause and effect relationship
between the two variables.
SIGNIFICANCE OF CORRELATION

It is used to determine the relationship between two variables.

 It reduces the range of uncertainty. The predictions based on


correlation analysis are more precise and reliable.

 It helps us to estimate the value of dependent variable for the


given value of independent variable.
TYPES OF CORRELATION
Correlation is described or classified in several different ways such as:
1. Positive and Negative Correlation: Whether correlation is positive (direct) or
negative (inverse) would depend upon the direction of change of the
variables. If both the variables are varying in the same direction i.e., if as one
variable is increasing the other, on an average is also increasing or, if as one
variable is decreasing the other, on an average , is also decreasing,
correlation is said to be positive.

If on the other hand, the variable are varying in positive direction, i.e. as one
variable is increasing the other is decreasing or vice versa , and correlation is
2. Linear and Curvilinear (Non-Linear) Correlation:
Linear Correlation: The correlation is said to be linear when the
amount of change in one variable tends to bear a constant ratio to
the amount of other variable’
Non-Linear Correlation : The correlation would be non-linear if the
amount of change in one variables does not bear a constant ratio to
the amount of change in the other variable.

LINEAR CORREALTION NON-LINEAR CORRELATION


METHODS OF STUDYING
CORRELATION
Correlation can be studied by any of the following method.

1. Scatter diagram method.

2. Karl Pearson’s coefficient of correlation.


SCATTER DIAGRAM METHOD
Scatter diagram or dot diagram is the simplest graphical device of showing
the correlation between two variables (x and y). Such diagrammatic
representation of bivariate data is known as scatter diagram.
Observations:
 Positive correlation: When the x and y values increases together there
will be a positive correlation.(r=+1)
 Negative correlation: when the x values get bigger and the y value
gets smaller there will be a negative correlation.(r=-1)
 No Correlation: When the points do not show a pattern there is no
correlation.(r=0)
It is simple and non-mathematical
method of studying correlation.

It is easy to understand.

Merits of scatter Demerits


diagram method

It gives only a rough idea of how


two variable are related.

Exact degree of correlation


between the two variables can not
be established by applying this
method.
KARL PEARSON’S COEFFICIENT OF
CORRELATION
 It is used universally for describing the degree of
correlation between two series.

 Formula for Pearson’s r is:

Modified formula:
Procedure for computing the
correlation coefficient
Calculate the mean of two series ‘x’ and ‘y’.

Calculate the deviations ‘x’ and ‘y’ in two series from their respective
mean.

Square each deviation of ‘x’ and ‘y’ then obtain the sum of the squared
deviation i.e.

 Multiply each deviation under x with each deviation under y and obtain
the product of ‘xy’. Then obtain the sum of the product of x,y i.e. Σxy

Substitute the value in the formula.


Example:
It is most important and precise method of
measuring the relationship of two variables.

It measures the direction as well as the relationship


between the two variables.

Merits of Karl Demerits


Pearson’s
Method
The computational procedure of
this method is difficult as
compared to other method.

The value of the coefficient is


affected by extreme items.

You might also like