GROUP NAME
PIONEER
GROUP MEMBERS
RAKIB MERCHANT
AYAN CHOKSI
MAHESH SINDHA
SANDEEP PANDEY
CORRELATION
• Correlation is the statistical tool with the help
of which these relationships between two or
more than two variables is studied.
• Correlation analysis refers to the techniques
used in measuring the closeness of the
relationship between the variables.
Positive and Negative
correlation
Simple, Partial and Multiple
correlation
Linear and Non-linear
correlation
Specific Example
Water
Consumption
Temperature (F) (ounces)
For seven
random summer 75 16
days, a person 83 20
recorded the
85 25
temperature and
their water 85 27
consumption, during 92 32
a three-hour period
97 48
spent outside.
99 48
How would you describe the graph?
Methods of studying correlation
Commonly used methods for studying the correlation
between two variables are
Scatter diagram method.
Karl Pearson's coefficient of correlation (covariance
method).
Two-way frequency table.
Rank method.
Concurrent deviations method.
REGRESSION
• The meaning of the term ‘Regression’ is the
act of returning or going back.
• Regression is the statistical tool with the help
of which we are in a position to estimate or to
predict the unknown values of one variable
from known values of another variable.
Correlation Vs. Regression Analysis
Correlation literally means the relationship between
two or more variables which vary. Regression means
stepping back or returning to the average value.
Correlation need not imply cause and effect
relationship between the variable under study.
Regression clearly indicates the cause and effect
relationship.
Correlation coefficient is a linear relationship
between x and y and is independent of the units of
measurement. It is pure number lying between +
or – 1. Regression is absolute measure and the
variable x and y are dependent on each other.
Correlation analysis is confined to only to study of
linear relationship between the variables and
therefore, has limited applications. Regression
analysis has wider application as it studies linear
as well as non-linear relationship between the
variables.
Regression: 3 Main Purposes
• To describe (or model)
• To predict (or estimate)
• To control (or administer)
Relationship Analysis
The examination of the association between
two or more variables. In marketing, some of
the more apparent relationships include
associations between advertising and sales,
company size and advertising budget, supply
and demand for products, and customer
satisfaction and customer loyalty.
DIFFERENCE BETWEEN CORRELATION AND
REGRESSION
The objective of
regression analysis is to
study the nature of
CORRELATION
relationship between the
variables
• It is a measure of degree of REGREESSION
relationship between
the variables
INTERPRETING THE COEFFICIENT
OF CORRELATION
When r= +1, there is a perfect
positive correlation
When r= -1, there is a perfect
negative correlation
When r= 0, there is no correlation
between the variables
The closer r is to +1 or -1, the closer
the relationship between the
variables
CONVERSION OF CORRELATION
INTO REGRESSION
• Regression= Correlation + Prediction
– predicting y based on x
– e.g., predicting….
• throwing points (y)
• based on distance from target (x)
• Regression equation
– formula that specifies a line
– y’ = bx + a
– plug in a x value (distance from target) and predict y (points)
– note
• y= actual value of a score
• y’= predict value
Steps to Reaching a Solution
• Draw a scatter plot of the data.
• Visually, consider the strength of the linear
relationship.
• If the relationship appears relatively strong,
find the correlation coefficient as a numerical
verification.
• If the correlation is still relatively strong, then
find the simple linear regression line.
DECISION TIME
If correlation analysis is a popular and
informative statistical method, why should
researchers bother using the somewhat
intimidating multivariate statistical
techniques? Do you feel there is really
much to gain from these methods?
Vote of thanks
• We are heartily thankful to Mr.
R K Singh sir who gave us this
project which in turn became
a great learning experience of
management as well as its
practical application.
• We would also like to thank
BIMS faculty and staff
members for their support
and finally we thank our
family, friends and colleagues
for their helping nature.
