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Important Notes in Correlation

Correlation measures the strength and direction of association between two variables. A positive correlation means that as one variable increases, the other also increases, while a negative correlation means that as one variable increases, the other decreases. Correlation analysis involves constructing a scatter plot and calculating a correlation coefficient to determine if there is no, weak, or strong correlation between the variables.

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31 views

Important Notes in Correlation

Correlation measures the strength and direction of association between two variables. A positive correlation means that as one variable increases, the other also increases, while a negative correlation means that as one variable increases, the other decreases. Correlation analysis involves constructing a scatter plot and calculating a correlation coefficient to determine if there is no, weak, or strong correlation between the variables.

Uploaded by

Dana Amor
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Correlation is a statistic that measures the direction and strength of association between two

variables.

Based on this correlation, a regression equation can be created to predict values for the
dependent
variable. This prediction method is called regression analysis.

>Correlation analysis is used to answer a big chunk of research questions those that ask what
effect or impact one variable has on another. Thus, it is can be used to accept or reject a major
type of hypothesis.

Correlation analysis begins with constructing a scatter plota diagram consisting of points plotted
on a
Cartesian plane, with x as the independent variable and y as the dependent variable. The points
show a
trend that corresponds to a correlational conclusion.

We say that there is positive correlation if the points approximate a line with a positive slope.
The closer the points are to making a perfect straight line, the stronger the correlation. On the
other hand,
there is negative correlation if the points approximate a line with a negative slope.

If points
approximate a horizontal line, or are scattered all over the plane without a visible linear
trend, then we say that there is no correlation between the variables involved.

A positive correlation means that as one variable increases, the other also increases. ( +, +)
Similarly, if one variable decreases, then the other one also decreases. (-, -)

A negative correlation means that as one variable increases, the other decreases, or vice versa.

Note that when we say there is no


correlation between two variables, we mean
that there is no linear correlation. It is possible that a different type of correlation
exists, but it is beyond the scope of the
lesson. It is also possible that no correlation of any type exists.
When studying things that are difficult to measure, we should expect the correlation
coefficients to be lower (e.g. above 0.4 to be relatively strong). When we are studying
things that are more easier to measure, such as socioeconomic status, we expect
higher correlations (e.g. above 0.75 to be relatively strong).)

https://www.simplypsychology.org/correlation.html#:~:text=A%20zero%20correlation
%20exists%20when,drunk%20and%20level%20of%20intelligence.

Correlations Between Health and Wealth


https://militaryfamilieslearningnetwork.org/2019/08/08/correlations-between-health-and-wealth/
The Relationship Between Income &
Expenditure
https://smallbusiness.chron.com/relationship-between-income-expenditure-35014.html

what correlation exists in time and distance

1) Right to left = perfect positive correlation


2) As the data is scattered it will become weak positive correlation.

When the data scattered from left to right= negative

What coordinates do you have?


In this function, y is the dependent variable and x is the independent variable.
Answer,

sales dependent (y) independent temperature (x)

Sales is the dependent (y) variable because as the temperature (x - independent) increases, it also
increases

because it is hot then more sales. (SALES IS HIGHLY DEPEND ON THE


TEMPERATURE)

Sales (y) and tourist (x)


"Correlation is not causation" means that just because two variables are related it
does not necessarily mean that one causes the other

There are a lot of factors that might affect the factors.

Correlation does not always prove causation as a third variable may be involved

A causation can apply another correlation.

TO IDENTIFY ITS CORRELATION

SCATTER PLOT (looking at a trend)

PEARSON. ( As the value approaches -1, the stronger it is. In terms of negative
correlation) *double check if you exists -1 and 1*

Stronger- nearer + ex 0.6


Pearson Product Moment Correlation (r)

The correlation coefficient (r) indicates the extent to which the pairs of numbers for
these two variables lie on a straight line. Values over zero indicate a positive correlation,
while values under zero indicate a negative correlation.
A correlation of –1 indicates a perfect negative correlation, meaning that as one variable
goes up, the other goes down. A correlation of +1 indicates a perfect positive
correlation, meaning that as one variable goes up, the other goes up.

The Pearson product moment correlation coefficient takes on values from 1 to 1, with 1
implying a perfect negative correlation, and 1 a perfect positive correlation. A negative
value for r implies negative correlation, with the correlation getting stronger as the
number approaches

A positive value for r implies positive correlation, getting stronger as the number
approaches to 1. A value for r that is very close to or equal to 0 implies no linear
correlation.

n = 6 (6 pairs)
x= average em
y= sales

Then substitute. “Strong positive


correlation”
USE THE GOOGLE SHEETS FUNCTIONS.

For ease in computation, we may use Google spreadsheet to get the Pearson product
moment correlation coefficient using the following steps.

Input the values for the independent variable in 1 column, and the values for the
dependent variable in another column.
Use the syntax PEARSON(A2:A100,B2:B100) by selecting the first value and
highlighting the column all the way to the last value.
Press Enter.

X first (independent)
AT LEAST 4 DECIMAL PLACES.
REGRESSION
IF THE TEMP IS 20 DEGREES, what will be the amount of sales?
a=slope [ getting the slope ]

y=ax+b { regression equation } to have a prediction of what would be the value of our
dependent variable.

EXAMPLE

Using the regression equation, we can now predict the results of our dependent
variable.

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