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Correlation and Regression 2

Correlation and regression are statistical methods used to analyze relationships between variables, with correlation measuring the strength and direction of the association, while regression models the relationship for predictions. Types of correlation include positive, negative, and zero correlation, with Pearson's and Spearman's coefficients used to quantify these relationships. Regression provides a functional relationship for predicting a dependent variable based on an independent variable, represented by the equation Y = a + bX.

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13 views2 pages

Correlation and Regression 2

Correlation and regression are statistical methods used to analyze relationships between variables, with correlation measuring the strength and direction of the association, while regression models the relationship for predictions. Types of correlation include positive, negative, and zero correlation, with Pearson's and Spearman's coefficients used to quantify these relationships. Regression provides a functional relationship for predicting a dependent variable based on an independent variable, represented by the equation Y = a + bX.

Uploaded by

Vishal Seksaria
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Correlation and Regression: A Comprehensive Explanation

Introduction to Correlation and Regression


Correlation and regression are two key statistical methods used in research and data analysis to
examine relationships between variables. While correlation measures the strength and direction of
the association between two variables, regression goes further by modeling the relationship and
making predictions. These concepts are widely applied in psychology, economics, biology, social
sciences, and business analytics to interpret data trends and infer potential causal relationships.

Understanding Correlation
Correlation refers to a statistical measure that determines the degree to which two variables are
related. It assesses whether changes in one variable correspond with changes in another and
quantifies this relationship using a correlation coefficient, typically denoted as r.

Types of Correlation
1. Positive Correlation: When an increase in one variable is associated with an increase in another.
2. Negative Correlation: When an increase in one variable leads to a decrease in another.
3. Zero Correlation: When there is no relationship between the two variables.

Pearson's Product-Moment Correlation Coefficient


The Pearson correlation coefficient measures the strength of a linear relationship between two
continuous variables. It is given by the formula:

r = [ Sigma (Xi - X_bar)(Yi - Y_bar) ] / [ sqrt( Sigma (Xi - X_bar)^2 ) * sqrt( Sigma (Yi - Y_bar)^2 ) ]
where X_bar and Y_bar are the mean values of X and Y.

Spearman's Rank Difference Correlation


The Spearman Rank Correlation is used when data is ordinal (ranked) rather than continuous. It is
given by the formula:

r_s = 1 - [ (6 Sigma d^2) / (n(n^2 - 1)) ]


where d is the difference between ranks and n is the number of observations.
Understanding Regression
Regression is a statistical technique used to predict one variable based on another. Unlike
correlation, which only measures association, regression provides a functional relationship between
variables, allowing for prediction and causality analysis.

The equation for simple linear regression is:


Y = a + bX

where Y is the dependent variable, X is the independent variable, a is the intercept, and b is the
slope.

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