Scribd
Upload
5 views24 pages

Lecture On Correlation

The document discusses the concept of correlation, which is a statistical relationship where a change in one variable results in a systematic change in another. It outlines the types of correlation: positive, negative, and no correlation, and describes methods for correlation analysis including scatter diagrams and the Pearson Product Moment Coefficient. Examples illustrate how to construct scatter plots and interpret the relationships between variables.

Uploaded by

fatimatahir0602
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
5 views24 pages

Lecture On Correlation

The document discusses the concept of correlation, which is a statistical relationship where a change in one variable results in a systematic change in another. It outlines the types of correlation: positive, negative, and no correlation, and describes methods for correlation analysis including scatter diagrams and the Pearson Product Moment Coefficient. Examples illustrate how to construct scatter plots and interpret the relationships between variables.

Uploaded by

fatimatahir0602
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 24

CORRELATION

STATISTICAL RELATIONSHIP

A statistical relationship exists if a change in one variable (X)


results in a systematic change (increase/decrease) in another
variable (Y).

We study the relationship of such types:

 Relation between height and weight


 Relation between height and age
 Relation between price and demand
STATISTICAL RELATIONSHIP

 Such a relationship is called statistical relationship.

 Special methods have been developed to discover the


existence of statistical relationship between two
variables.

 When both the variables are quantitative, we use the


term correlation. This analysis is designed to describe
the methods to find out if the statistical relationship
between the two variables exists or not.
CORRELATION

 Correlation, is a measure of the degree to which any


two variables vary together. In other words, two
variables are said to be correlated if they tend to
simultaneously vary in some direction.

 Correlation is a statistical method used to determine,


whether a relationship between variables exists or not.

 Correlation is a linear association between two


random variables.
TYPES OF CORRELATION

1. Positive Correlation

 A positive relationship
exists when both variables
increase or decrease at the
same time.
 For instance,
 a person’s height and weight
are related; and the
relationship is positive, since
the taller a person is,
generally, the more the
person weighs.
TYPES OF CORRELATION

2. Negative Correlation

 In a negative relationship, as
one variable increases, the other
variable decreases, and vice
versa.
 For example, if you measure the
strength of people over 60 years
of age, you will find that as age
increases, strength generally
decreases. The word generally is
used here because there are
exceptions.
 The volume of gas will decrease
as the pressure increases.
 GPA will decrease as the Hours
of video games played increases.
TYPES OF CORRELATION

3. No Correlation

It means that two variables do


not follow the same or opposite
trend together.

 The number of freckles on a


person’s face and the number
of T-shirts they have.
 Average time spent watching
TV in a week and size of
television.
CORRELATION ANALYSIS

Correlation Analysis involves various methods and


techniques used for studying and measuring the extent
of the relationship between two variables.

There are two methods mostly used to study Correlation.

 Scatter Diagram
 Pearson Product Moment Coefficient of Correlation
SCATTER DIAGRAM
 A scatter plot is a graph of the ordered pairs (x,y) of
numbers consisting of the variable x and the variable y.
 The scatter plot is a visual way to describe the nature of the
relationship between the independent and dependent
variables.
 The scales of the variables can be different, and the
coordinates of the axes are determined by the smallest and
largest data values of the variables.
 A first step in finding whether or not a relationship between
two variables exists, is to plot each pair of observations (x,y)
along two axes, the pattern of the resulting points reveal any
correlation present.
 If a relationship between the variables exists, then the points
in the scatter diagram will show a tendency to cluster around
a straight line or some curve.
EXAMPLE 1:
CONSTRUCT A SCATTER PLOT FOR THE DATA SHOWN FOR
CAR RENTAL COMPANIES IN THE UNITED STATES FOR A
RECENT YEAR.

Company Car (in ten Revenue (in


Thousands) billions)
A 63 7
B 29 3.9
C 20.8 2.1
D 19.1 2.8
E 13.4 1.4
F 8.5 1.5
DRAW SCATTER PLOT (USING EXCEL)

SCATTER PLOT
8

Revenue (in billions)


7
6
5
4
3
2
1
0
0 20 40 60 80
Car (in ten thousands)

The above plot suggests a


positive relationship, since as
the number of cars (rented)
increases, revenue tends to
increase also.
EXAMPLE 2:
CONSTRUCT A SCATTER PLOT FOR
THE DATA OBTAINED IN A STUDY ON
THE NUMBER OF ABSENCES AND THE
FINAL GRADES OF SEVEN RANDOMLY SCATTER PLOT
SELECTED STUDENTS FROM A 100
STATISTICS CLASS. THE DATA ARE

Final Grade (%)


80
SHOWN BELOW. 60

40

Student Number of Final 20


absences Grade % 0
(X) (Y) 0 5 10 15 20
Number of Absences
A 6 82
B 2 86
C 15 43 The plot of the data suggests a
D 9 74
negative relationship, since as
the number of absences
E 12 58 increases, the final grade
F 5 90 decreases.
G 8 78
EXAMPLE 3:
CONSTRUCT A SCATTER PLOT FOR THE
DATA OBTAINED IN A STUDY ON THE
NUMBER OF HOURS THAT NINE PEOPLE SCATTER PLOT
80
EXERCISE EACH WEEK AND THE 70

Amount of Milk
AMOUNT OF MILK (IN OUNCES) EACH 60
50
PERSON CONSUMES PER WEEK. THE 40
DATA ARE SHOWN BELOW. 30
20
10
0
Subject Hours (X) Amount (Y) 0 5 10 15
Number of Hours
A 3 48
B 0 8
C 2 32
The plot of the data shows no
D 5 64 specific type of relationship
E 8 10 between variables, since no
pattern is discernible.
F 5 32
G 10 56
H 2 72
I 1 48
PEARSON PRODUCT MOMENT
CORRELATION COEFFICIENT
COEFFICIENT OF CORRELATION
CORRELATION COEFFICIENT
INTERPRETATION GUIDELINE
GRAPHICAL INTERPRETATION OF ‘R’
EXAMPLE 1: (SLIDE #10)
EXAMPLE 2: THE FOLLOWING TABLE SHOWS THE PRICE (IN 1000$) AND
DEMAND (IN 100S) OF THE ELECTRIC FANS IN A SUMMER. CALCULATE
THE COEFFICIENT OF CORRELATION BETWEEN X AND Y AND INTERPRET
THE RESULTS.

Price (X) Demand (Y)


3 17
4 16
5 15
6 13
7 11
8 10
9 8
10 9
11 7
12 6
CALCULATIONS
PROPERTIES OF ‘R’

The correlation co-efficient ‘r’ is independent of origin and


scale.
PRACTICE QUESTIONS

1. Draw scatter plot and calculate the


coefficient of correlation of the supply
and demand data given below:
Supply (X) 1 2 3 4 5 6 7 8
Demand(Y) 3 4 6 8 10 12 14 15

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy