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4-1 Introduction To Corrrelation and Its Properties

This document discusses correlation analysis in statistics. It defines correlation as the tendency of two variables to vary together. It provides examples of positively and negatively correlated variables in daily life. The document explains that correlation can be simple, multiple, or partial, and linear or nonlinear. It also outlines methods for studying correlation, including scatter plots and correlation coefficients. The Pearson product-moment correlation coefficient is discussed as a measure of the strength and direction of linear correlation between two variables.

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30 views14 pages

4-1 Introduction To Corrrelation and Its Properties

This document discusses correlation analysis in statistics. It defines correlation as the tendency of two variables to vary together. It provides examples of positively and negatively correlated variables in daily life. The document explains that correlation can be simple, multiple, or partial, and linear or nonlinear. It also outlines methods for studying correlation, including scatter plots and correlation coefficients. The Pearson product-moment correlation coefficient is discussed as a measure of the strength and direction of linear correlation between two variables.

Uploaded by

Raja one
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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STA404

Regression & Correlation Analysis


Lesson 4

What is Correlation?
Introduction, basic concepts and
properties
Correlation

The word Correlation is made of Co- (meaning "together"),


and Relation

Definition:
Two variables are said to be correlated if they tend to simultaneously
vary together in some direction.

If the quantities(X,Y) vary in such a way that change in one variable


corresponds to change in the other variable then the variables
X and Y are correlated.
Daily life Examples of Correlation
• Taller people have larger shoe sizes

• As the temperature goes up, ice cream sales also go up.

• As the slope of a hill increases, the amount of speed a walker reaches


may decrease.

• The older a man gets, the less hair that he has.

• The more years of education you complete, the higher your earning
potential will be.
Types of Correlation

• When plotted on a graph it looks like a straight line

• When plotted on a graph it is NOT a straight line


Types of Correlation

• Involve two and one dependent variable

• One dependent and more than one independent variables

• One dependent variable and more than one independent variable


but only one independent variable is considered and other
independent variables are considered constant
Types of Correlation

• A positive correlation is a relationship between two variables where if one


variable increases, the other one also increases. A positive correlation also
exists if one decreases and the other also decreases.

• A negative correlation means that there is an inverse relationship between


two variables - when one variable decreases, the other increases. The vice
versa is a negative correlation too, in which one variable increases and the
other decreases.

• Their movement is independent from each other.


Methods of Studying Correlation
The following are the important methods of ascertaining relationship
between two variables.

 Scatter plot method


 Karl Pearson’s Coefficient
 Spearman’s Rank Correlation Coefficient

Scatter Plot Method:


The simplest device for studying correlation between two variables is
a scatter plot.
How to measure correlation
numerically?
• Statisticians use a measure called the correlation coefficient to
determine the strength of the linear relationship between two
variables.

• There are several types of correlation coefficients.

• The one explained in this section is called the Pearson product


moment correlation coefficient (PPMC),

• It was named after statistician Karl Pearson, who pioneered the


research in this area.
Correlation Coefficient
• The correlation coefficient computed from the sample data measures
the strength and direction of a linear relationship between two
variables.

r
• The symbol for the sample correlation coefficient is .

• The symbol for the population correlation coefficient is (Greek small


letter “rho”).
Correlation Coefficient –
Important points
• The range of the correlation coefficient is from -1 to +1.

• If there is a strong positive linear relationship between the variables,


the value of r will be close to 1.

• If there is strong negative linear relationship between the variables,


the value of r will be close to1.

• When there is no linear relationship between the variables or only a


weak relationship, the value of r will be close to 0.
Relationship between correlation
coefficient and scatter plot

Notice that as the value of the correlation coefficient


increases from 0 to 1 (parts a, b, and c), data values
become closer to an increasingly stronger relationship.
Relationship between correlation
coefficient and scatter plot

As the value of the correlation coefficient decreases from 0


to 1 (parts d, e, and f ), the data values also become closer
to a straight line. Again this suggests a stronger relationship.
Summary

• The word Correlation is made of Co- (meaning "together"),


and Relation
• Correlation can be simple, multiple and partial

• It can be liner or nonlinear

• Positive and negative correlation

• Correlation coefficient is used to measure its numerical value

• Range of correlation coefficient is from -1 to +1


- The END -

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