Pearson’s Product-Moment Correlation Coefficient

- is a measure of the linear strength of the association between two variables.It is

founded by Karl Pearson. The value of the correlation coefficient lies around ±1, then
it is said to be a perfect degree of association between the two variables. As the value
of the correlation coefficient goes to zero, the relationship between the two variables
will be weaker.

The following formula is used to calculate the Pearson r correlation:

n xy  ( x)(  y )
r
[n( x )  ( x) 2 ][ n( y 2 )  ( y ) 2
2

The following summarizes the correlation coefficient and strength of relationships:

0.00 → no correlation, no relationship

±0.01 to ±0.20 → very low correlation, almost negligible relationship
±0.21 to ±0.40 → slight correlation, definite but small relationship
±0.41 to ±0.70 → moderate correlation, substantial relationship
±0.71 to ±0.90 → high correlation, marked relationship
±0.91 to ±0.99 → very high correlation, very dependable relationship
±1.00 → perfect correlation, perfect relationship

PROBLEM SOLVING

1. The owner of a chain of fruit shake stores would like to study the correlation
between atmospheric temperature and sales during the summer season. A random
sample of 12 days is selected with the results given as follows:

Day 1 2 3 4 5 6 7 8 9 10 11 12
Temperature (°F) 93 94 97 85 88 82 83 90 84 78 76 79
Total 192 211 209 187 200 150 155 206 168 147 143 147
Sales(Units)
Does it appear that there is a relationship between atmospheric temperature and
sales? Compute the coefficient of correlation and interpret the results.

2. A tobacco company statistician wanted to know whether heavy smoking is related

to longevity. From a sample of recently deceased smokers, the number of cigarettes
(estimated on a per day for the last five years after visits with their surviving relatives)
is paired with the number of years that they lived.

Smokers Number of Years Lived

Cigarettes
1 27 62
2 35 68
3 44 61
4 50 52
5 71 40
6 73 42
7 65 40
8 48 66
9 20 75
Is there a relationship between the number of cigarettes used by smokers and
years they lived? Compute the coefficient of correlation and interpret the results.