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DILDAR ALI
CORRELATION
COURSE INSTRUCTOR
MR. SHAHBAZ ALI
SEQUENCE:
Definition
Types
Methods
Pearson Product Moment Correlation
Coefficient
Example 10.5
Properties
Example 10.6
DEFINITION
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 analysis also deals with the association
between two or more variables.
Types of Correlation
1. Simple Correlation
1. Positive Correlation 1. Linear Correlation
2. Partial Correlation
2. Negative Correlation 2. Non-Linear Correlation
3. Multiple Correlation
On the basis of degree of Correlation
Pearson Product
Moment Correlation
Co-efficient
Spearman’s Rank
Correlation
Scatter Diagram/Two
way frequency table
Co-efficient of
concurrent deviation
Pearson Product Moment Correlation
Coefficient:
The numerical measure of strength in the linear
relationship between any two variables is called the
Pearson’s Product moment correlation coefficient or
the coefficient of simple correlation or total
correlation.
The Sample linear Correlation coefficient for n pairs
of observations (Xi , Yi) usually denoted by the
letter r, is defined by
( )( )
( ) ( )
The Coefficient of Correlation r is a pure number (i.e. independent
of the units in which the variables are measured).
It assumed values that can range from +1 for perfect positive linear
relationship, to -1, for perfect negative linear relationship with the
intermediate value of zero indicating non-linear relationship
between X and Y.
The sign of r indicates the direction of the relationship or
correlation.
DERIVATION:
EXAMPLE 10.5:
X 1 2 3 4 5
Y 2 5 3 8 7
Alternatively, the following table is set up
for calculation of r.
Properties Of Correlation: