Correlation Coefficient

How well does your regression equation truly represent your set of data? One of the ways to determine the answer to this question is to exam the correlation coefficient and the coefficient of determination.
The correlation coefficient, r, and the coefficient of determination, r 2 , will appear on the screen that shows the regression equation information
(be sure the Diagnostics are turned on --2nd Catalog (above 0), arrow down to DiagnosticOn, press ENTER twice.)

In addition to appearing with the regression information, the values r and r 2 can be found under VARS, #5 Statistics EQ #7 r and #8 r 2 .

Correlation Coefficient, r :
The quantity r, called the linear correlation coefficient, measures the strength and the direction of a linear relationship between two variables. The linear correlation
coefficient is sometimes referred to as the Pearson product moment correlation coefficient in honor of its developer Karl Pearson.

The mathematical formula for computing r is:

where n is the number of pairs of data. (Aren't you glad you have a graphing calculator that computes this formula?) The value of r is such that -1 < r < +1. The + and signs are used for positive linear correlations and negative linear correlations, respectively. Positive correlation: If x and y have a strong positive linear correlation, r is close to +1. An r value of exactly +1 indicates a perfect positive fit. Positive values indicate a relationship between x and y variables such that as values for x increases, values for y also increase. Negative correlation: If x and y have a strong negative linear correlation, r is close to -1. An r value of exactly -1 indicates a perfect negative fit. Negative values indicate a relationship between x and y such that as values for x increase, values for y decrease. No correlation: If there is no linear correlation or a weak linear correlation, r is close to 0. A value near zero means that there is a random, nonlinear relationship between the two variables Note that r is a dimensionless quantity; that is, it does not depend on the units employed. A perfect correlation of 1 occurs only when the data points all lie exactly on a straight line. If r = +1, the slope of this line is positive. If r = -1, the slope of this line is negative. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally described as weak. These values can vary based upon the "type" of data being examined. A study utilizing scientific data may require a stronger correlation than a study using social science data.

Coefficient of Determination, r 2 or R2 :
The coefficient of determination, r 2, is useful because it gives the proportion of the variance (fluctuation) of one variable that is predictable from the other variable. It is a measure that allows us to determine how certain one can be in making predictions from a certain model/graph. The coefficient of determination is the ratio of the explained variation to the total variation. The coefficient of determination is such that 0 < r 2 < 1, and denotes the strength of the linear association between x and y. The coefficient of determination represents the percent of the data that is the closest to the line of best fit. For example, if r = 0.922, then r 2 = 0.850, which means that 85% of the total variation in y can be explained by the linear relationship between x and y (as described by the regression equation). The other 15% of the total variation in y remains unexplained. The coefficient of determination is a measure of how well the regression line

represents the data. If the regression line passes exactly through every point on the scatter plot, it would be able to explain all of the variation. The further the line is away from the points, the less it is able to explain.

Types of Linear Correlation

In statistics, linear correlation refers to a measure of association between two interval-ratio variables. Interval-ratio variables are those that can be put in order and are numerical. The measure also reflects the degree of strength of the relationship between the variables. There are a few different types of correlation measure.

1. Pearson's Correlation Coefficient (r)

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Pearson's R measures the strength or degree of association between two interval ratio variables ranging from .0 to 1 either positive or negative. It is the square root of correlation determination. The closer the measure is to 1 or -1, the stronger the relationship. Thus, 80 or 90 in either direction indicates a strong relationship exists. Zero means there is no correlation. Pearson's R is the most commonly used correlation measure. It uses the following formula: R = covariance/(standard deviation x)(standard deviation y).

2. Correlation Determination
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Correlation determination measures the proportional reduction error resulting from linear regression. According to the text "Social Statistics for a Diverse Society," correlation determination also shows "the proportion of the total variation in the dependent variable y, which is explained by the independent variable x." If r = .60, then 60 percent of the variation of y is explained by x. It is also referred to as the coefficient of determination. The formula used to calculate correlation determination is as follows: R squared = covariance squared/(variance x)(variance y). A negative sign is added to the answer if the original covariance was also negative.

3. Scatter Diagram
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The scatter diagram (also called a scatter plot) shows the relationship of two interval ratio variables on a coordinate grid. Only points are shown. It is the first step of regression analysis. It is a quick way to see if the variables are associated and the strength of the association. A scatter diagram also shows the direction of the relationship. All points clustered together in a straight line suggests there is a strong relationship. Even if a few points are outside of the line, a relationship can still exist. If the points are not clustered and are scattered, it is random and there is no relationship.

Positive or Negative Correlation

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Associations between variables can be positive or negative. This only refers to the direction of the relationship. A positive correlation means that both variables are increasing, while a negative correlation means that as one variable increases the other decreases. Perfect positives in Pearson's R will equal +1 and a perfect negative will equal -1. In a scatter diagram, if the points form a line from bottom left to the upper right on the grid, the correlation is positive. If it goes from upper left to bottom right, it is negative.

How to Determine Linear Correlation

By Ryan Menezes, eHow Contributor updated June 06, 2011

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Highly vertical graphs correspond with strong correlations. The linear correlation between two variables is the slope of the line joining the variables on a graph. A correlation close to "0" implies that the correlation between the variables, if any exists at all, is very small. A correlation of "1" suggests a strong correlation, and correlation could also be much higher and stronger. A highly negative slope also corresponds with a strong correlation, but this plot's variables would share an inverse relationship rather than a direct one. Related Searches:

Linear Motion Systems

Positive Slope Definition

Difficulty: Moderately Easy

Instructions
1.
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1 Identify two points on the linear graph that tracks the variables. For instance, two points may have coordinates of (3, 8) and (9, 9).

2 Subtract the first point's y coordinate from the second's: 9 - 8 = 1.

3 Subtract the first point's x coordinate from the second's: 9 - 3 = 6.

4 Divide the change in y between the two points by the the change in x: 1 6 = 0.167. This is the correlation between the graph's variables.