CORRELATION (7.

1)
The correlation between two variables is a measure o the !irection an! stren"th o the linear relationshi# the two
variables have with each other.
r $
S
S S
xy
xx yy
( )( )
B1(hat) and r always have the same sign
%ro#erties o the correlation coeicient& r


1. ' 1 r 1


(. r $ ) 1 or r $ 1 im#lies the !ata alls #erectl* on a strai"ht line. +tron" ne"ative or #ositive
relationshi#s are in!icate! b* values o r near ) 1 or 1. ,alues o r near - in!icate little or no
linear relationshi# between the two variables. +ee .i"ures 7./ an! 7.0 on #a"es 1-2 an! 11- in the
te3t or some e3am#les.


/. The correlation coeicient measures onl* the linear relationshi#. There coul! be other t*#es o
relationshi# between 3 an! * even when r $ -.
Example: A circle, or a parabola etc There is clearly a relationship, bt it is not linear!
0. Correlation !oes not necessaril* im#l* causation.
4$shoe si5e or chil!ren a"es 1)1(
6$score on stan!ar!i5e! rea!in" test scores (stron" #ositive correlation to 3)
"st becase an r vale is # !$$$$ it does not mean they are related
%ot casal, both x and y are strongly related to age
&' correlation is positive, r ( ) say *x and y tend to go in the same direction!+
&' correlation is negative, r , ) say *x and y tend to go in opposite directions!+
E3am#les7 .or each o the two class e3am#les& calculate the correlation an! inter#ret the value in terms o the
#roblem.
+im#le E3am#le 8aitin" time an! 9 chec:outs
Cumulative snow all increases as 9 o wee:s
Into winter increases
8aitin" time in line at the store ten!s to increase as 9 o
Chec:out lanes o#en !ecreases.
COE..ICIENT O. ;ETER<INATION
Coeicient o ;etermination7 r
(
$ ( r )
(
$
S
S S
xy
xx yy
(
( )( )


The value r
(
is another wa* o measurin" how stron" the linear relationshi# between 3 an! * is& however&
it !oes not measure the !irection o the relationshi# since - r
(
1 . The wa* we will inter#ret r
(
is
that it tells us how much better we can #re!ict * i we :now the corres#on!in" value o 3 ( measurin" the
error variabilit* o the sam#le * values aroun! the least s=uares line ) as o##ose! to i we !i!n>t :now the
corres#on!in" value o 3 ( measurin" the error variabilit* o the sam#le * values aroun! the value o
y
).
+ee .i"ure 7.1( on #a"e 1/1 in the te3t.
E3am#les7 .or each o the two class e3am#les& calculate the coeicient o !etermination an! inter#ret the value
in terms o the #roblem.
+im#le E3am#le 8aitin" time an! 9 chec:outs
r?( $ .200?($.@211 we can #re!icte! cumulative r?($.0/@ 8e can #re!ict waitin" time in line 00A
snowall @2A better i we :now 9 wee:s intobetter i we :now 9 o chec:outs o#en than i we !i!n>t
winter than i we !i!n>t :now 9 wee:s :now.