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Lecture-1 Correlation & Types

The document discusses correlation and its types. [CO1-CO5] outline the course outcomes, including understanding statistical techniques, correlating measures with problems, examining statistical results, predicting trends, and adjusting time series data. Correlation measures the relationship between variables, expressed as a coefficient between -1 and 1. Positive correlation means variables change in the same direction, while negative means they change oppositely. Correlation can be simple, multiple, or partial. It can also be linear, showing a constant ratio of changes, or non-linear.

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22 views15 pages

Lecture-1 Correlation & Types

The document discusses correlation and its types. [CO1-CO5] outline the course outcomes, including understanding statistical techniques, correlating measures with problems, examining statistical results, predicting trends, and adjusting time series data. Correlation measures the relationship between variables, expressed as a coefficient between -1 and 1. Positive correlation means variables change in the same direction, while negative means they change oppositely. Correlation can be simple, multiple, or partial. It can also be linear, showing a constant ratio of changes, or non-linear.

Uploaded by

gautam maggoVWsKrHajMQ
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INSTITUTE: Chandigarh University

DEPARTMENT: University School of Business


SUBJECT NAME: Decision Science-I
SUBJECT CODE: 21BAT614

TOPIC OF PRESENTATION
CORRELATION DISCOVER . LEARN . EMPOWER
Course Outcome After undergoing this Course, the students will be able:

CO1 To understand and remember the nature of data and various statistical
techniques
CO2 To categorize and correlate the different descriptive measures with the various
complex managerial problems

CO3 To examine the results of different statistical techniques on diverse set of data

CO4

To predict and forecast the future through time series modeling


CO5 To devise a mechanism for shifting and splicing the base of a time series data
with the help of index numbers.
Introduction
 Correlation is a statistical tool that helps to measure and analyze the
degree of relationship between two variables.
 Correlation analysis deals with the association between two
or more variables

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Correlation
 The degree of relationship between the variables under consideration is
measure through the correlation analysis.
 The measure of correlation called the correlation coefficient
 The degree of relationship is expressed by coefficient which range from
correlation ( -1≤ r ≤ +1)
 The direction of change is indicated by a sign.
 The correlation analysis enable us to have an idea about the degree & direction
of the relationship between the two variables under study.

4
Types of Correlation

Type-I

Positive Correlation Negative Correlation

Ms. Rattan Laxmi


Types of Correlation Type-I

 Positive Correlation: The correlation is said to be positive


correlation if the values of two variables changing with same
direction.
• Ex. Pub. Exp. & sales, Height & weight.
 Negative Correlation: The correlation is said to be negative
correlation when the values of variables changewith opposite
direction.
• Ex. Price & qty. demanded.
Direction of the Correlation
•Positive relationship – Variables change in the same direction.
 As X is increasing, Y is increasing
 As X is decreasing, Y is decreasing

• E.g., As height increases, so does weight


 Negative relationship – Variables change in opposite
directions.
 As X is increasing, Y is decreasing
 As X is decreasing, Y is increasing

 E.g., As TV time increases, grades decrease


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Types of Correlation

Type-I

Simple Correlation Partial Correlation Multiple Correlation

Ms. Rattan Laxmi


Types of Correlation Type-II
 Simple correlation: Under simple correlation problem
there are only two variables are studied.
 Multiple Correlation: Under Multiple Correlation three
or more than three variables are studied. Ex. Qd = f
( P,PC, PS, t, y )
 Partial correlation: analysis recognizes more than two
variables but considers only two variables keeping the
other constant.
Types of Correlation

Type-I

Linear Correlation Non-Linear Correlation


Types of Correlation Type-III
 Linear correlation: Correlation is said to be linear when the amount of change in one
variable tends to bear a constant ratio to the amount of change in the other. The graph
of the variables having a linear relationship will form a straight line.
• Ex X = 1, 2, 3, 4, 5, 6, 7, 8,

• Y = 5, 7, 9, 11, 13, 15, 17, 19, Y = 3 + 2x

 Non Linear correlation: The correlation would be non linear if the amount of change in
one variable does not bear a constant ratio to the amount of change in the other variable.

11
References
TEXT BOOKS
• 1. Levine, D., Sazbat, K. and Stephan, D. 2013. Business Statistics, 7thEdition,
Pearson Education, India, ISBN: 9780132807265.
• 2. J.K Sharma, 2012. Business Statistics, 2nd Edition, Sixth Impression, Pearson
Education India, 2012 a, ISBN: 9788177586541
 
REFERENCE BOOKS
• R1 J.K Sharma, Fourth Edition 2014 Business Statistics , Vikas Publishing House ,
ISBN: 9789325980805.
• R2 Gupta, S. 2011. Statistical Methods, 4thEdition, Sultan Chand & Sons, ISBN:
8180548627
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References
• https://www.youtube.com/watch?v=JMaGsy3hlGQ&list=PLUgZaFoyJa
fgUUqAf1-y9xmq68eYdbTqW
(Correlation)
• https://www.youtube.com/watch?v=aEYFd277Xfs&list=PLUgZaFoyJafg
UUqAf1-y9xmq68eYdbTqW&index=2
(Types of Correlation)
• https://www.youtube.com/watch?v=Uw0W1ulNzik&list=PLUgZaFoyJa
fgUUqAf1-y9xmq68eYdbTqW&index=3
• https://www.youtube.com/watch?v=5F2sX4mPAmI&list=PLUgZaFoyJa
fgUUqAf1-y9xmq68eYdbTqW&index=4

13
Assessment Pattern

14
THANK YOU

For queries get in touch with me at:


[email protected]

15

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