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Correlation Analysis

This document discusses correlation analysis and how it can be used to determine the nature and strength of the relationship between two variables. Correlation ranges from +1, indicating a perfect positive correlation, to -1, indicating a perfect negative correlation. The Pearson correlation coefficient is the most common measure of correlation and reflects the degree of linear relationship between two variables. Multicollinearity occurs when two variables are highly correlated at 0.90 or greater, meaning they convey essentially the same information.

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47 views7 pages

Correlation Analysis

This document discusses correlation analysis and how it can be used to determine the nature and strength of the relationship between two variables. Correlation ranges from +1, indicating a perfect positive correlation, to -1, indicating a perfect negative correlation. The Pearson correlation coefficient is the most common measure of correlation and reflects the degree of linear relationship between two variables. Multicollinearity occurs when two variables are highly correlated at 0.90 or greater, meaning they convey essentially the same information.

Uploaded by

Scorpian Mounieh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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LOGO

CORRELATION ANALYSIS

Introduction
Correlation a LINEAR association between two random variables Correlation analysis show us how to determine both the nature and strength of relationship between two variables When variables are dependent on time correlation is applied Correlation lies between +1 to -1

A zero correlation indicates that there is no relationship between the variables A correlation of 1 indicates a perfect negative correlation A correlation of +1 indicates a perfect positive correlation

Scatter plot showing correlations

SPSS (Correlation)
AnalyzeCorrelate (Bivariate)

Points to be noted:
1. Confidence Level
Correlation is highly significant 0.01** Correlation is significant 0.05*

2. N (sample size) 3. Pearson Correlation

Pearson Correlation
The most common measure of correlation is the Pearson Correlation. Pearson's correlation reflects the degree of linear relationship between two variables. It ranges from +1 to -1. The correlation between two variables reflects the degree to which the variables are related.

Multicollinearity

Multicollinearity occurs when variables are so highly correlated. In other words, when two variables are highly correlated, they both convey essentially the same information. Correlations of .90 or greater may indicate Multicollinearity.

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