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14 Correlation 08 02 2024

This document discusses different types of correlation between two or more variables. It defines correlation as a measure of the association between variables, where changes in one variable are accompanied by changes in the other. The key types of correlation discussed are: - Positive and negative correlation, depending on whether variables move in the same or opposite directions. - Simple and multiple correlation, with simple examining the relationship between two variables and multiple among three or more variables. - Linear and non-linear correlation, depending on whether the ratio of change between variables is constant. Methods for studying correlation include scatter diagrams, Karl Pearson's coefficient of correlation, and rank correlation. Scatter diagrams plot the variables to visualize their relationship.

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49 views18 pages

14 Correlation 08 02 2024

This document discusses different types of correlation between two or more variables. It defines correlation as a measure of the association between variables, where changes in one variable are accompanied by changes in the other. The key types of correlation discussed are: - Positive and negative correlation, depending on whether variables move in the same or opposite directions. - Simple and multiple correlation, with simple examining the relationship between two variables and multiple among three or more variables. - Linear and non-linear correlation, depending on whether the ratio of change between variables is constant. Methods for studying correlation include scatter diagrams, Karl Pearson's coefficient of correlation, and rank correlation. Scatter diagrams plot the variables to visualize their relationship.

Uploaded by

arin.singla.09
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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

• Correlations tell us to the degree that two variables are similar or associated
with each other. It is a measure of association.
• When two variables are related in such a way that a change in the value of one is
accompanied either by a direct change or by an inverse change in the values of
the other, the two variables are said to be correlated.
• A greater change in one variable resulting in a corresponding greater or smaller
change in the other variable is also known as correlation.

Example: Relationship exists between the price and demand of a commodity


because keeping other things equal, an increase in the price of a commodity shall
cause a decrease in the demand for that commodity. Relationship might exist
between the heights and weights of the students and between amount of rainfall in
a city and the sales of raincoats in that city.
Types of Correlation
Correlation can be categorized as one of the following:
(i) Positive and Negative,
(ii) Simple and Multiple.
(iii) Partial and Total.
(iv) Linear and Non-Linear (Curvilinear)

(i) Positive and Negative Correlation : Positive or direct Correlation refers to the
movement of variables in the same direction. The correlation is said to be positive when
the increase (decrease) in the value of one variable is accompanied by an increase
(decrease) in the value of other variable also.
Negative or inverse correlation refers to the movement of the variables in
opposite direction. Correlation is said to be negative, if an increase (decrease) in
the value of one variable is accompanied by a decrease (increase) in the value of
other.
(ii) Simple and Multiple Correlation : Under simple correlation, we study the relationship
between two variables only i.e., between the yield of wheat and the amount of rainfall or
between demand and supply of a commodity. In case of multiple correlation, the
relationship is studied among three or more variables.
For example, the relationship of yield of wheat may be studied with both chemical
fertilizers and the pesticides.

(iii) Partial and Total Correlation : There are two categories of multiple correlation
analysis. Under partial correlation, the relationship of two or more variables is studied in
such a way that only one dependent variable and one independent variable is considered
and all others are kept constant.
For example, coefficient of correlation between yield of wheat and chemical fertilizers
excluding the effects of pesticides and manures is called partial correlation. Total
correlation is based upon all the variables.
(iv) Linear and Non-Linear Correlation: When the amount of change in one variable
tends to keep a constant ratio to the amount of change in the other variable, then the
correlation is said to be linear. But if the amount of change in one variable does not
bear a constant ratio to the amount of change in the other variable then the
correlation is said to be non-linear. The distinction between linear and non-linear is
based upon the consistency of the ratio of change between the variables.

Methods of Studying Correlation:


There are different methods which helps us to find out whether the variables are
related or not.
1. Scatter Diagram Method.
2. Karl Pearson’s Coefficient of correlation.
• 3. Rank Method.
Scatter diagram
• Rectangular coordinate
• Two quantitative variables
• One variable is called independent (X) and the second is
called dependent (Y)
• Points are not joined
• No frequency table
Y
* *
*
X
Example Wt. 67 69 85 83 74 81 97 92 114 85
(kg)
SBP 120 125 140 160 130 180 150 140 200 130
(mmHg)

220

200

180

160

140

120

100

wt (kg)
80
60 70 80 90 100 110 120

Scatter diagram of weight and systolic blood pressure


220

200

180

160

140

120

100

80 Wt (kg)
60 70 80 90 100 110 120

Scatter diagram of weight and systolic blood pressure


Scatter plots

The pattern of data is indicative of the type of relationship


between your two variables:
positive relationship
negative relationship
no relationship
Positive relationship
18

16

14

12
Height in CM

10

0
0 10 20 30 40 50 60 70 80 90
Age in Weeks
Negative relationship

Reliability

Age of Car
No relation
Karl Pearson’s Co-efficient of Correlation
Karl Pearson’s method, popularly known as Pearsonian co-efficient of correlation, is
most widely applied in practice to measure correlation.
It is denoted by or or
Variance and Covariance (Recall)
As the variance measures the variations of the RV from its mean
value , the quantity measures the simultaneous
variation of two RV’s and from their respective means and hence it is called
the covariance of and denoted as

is also called the product moment of


and Y.
Though is a useful measure of the degree of correlation between and , it is
to be expressed in mixed units of and . To avoid this difficulty and to express the
degree of correlation in absolute units, we divide by , so that
is a mere number, free from the units of and .

The sign of or or denotes the nature of association


while the value of denotes the strength of association.

Depending on the value of , we can classify correlation as follows.


 If , both the variables and increase or decrease in the same proportion. In this
case we say that there is perfect positive correlation.
 If , both the variables and are inversely proportion to each other. In this
case we say that there is perfect negative correlation.
 If , we say that and are uncorrelated.
 If , there is moderate (partial) positive correlation between and .
 If , there is moderate (partial) negative correlation between and .
We will mainly deal with linear correlation of discrete RV’s and . will take
the values with frequency 1 each and will simultaneously take the
values with frequency 1 each.

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