ASSIGNMENT NO.
1
Submitted by:
Maryam Hafeez
Submitted to:
Sir Zeeshan
Topic:
Pearsons product moment
correlation coefficient
Date:
12 September 2024
Positive Correlation:
Increase or decrease Increase or decrease in
in first variable second variable
Eg: Height & weight
Negative Correlation:
Increase or decrease Increase or decrease in
in first variable second variable
Eg: Price & Quantity demanded
Correlation
Correlation is a statistical tool that
helps to measure and analyse the
degree of relationship between two
variables.
Correlation analysis deals with the
association between two or more
variables.
Types of Correlation
positive
correlation
correlation
negative
correlation
Karl Pearson’s Coefficient of
Correlation
Pearson’s “r” is the most common correlation
coefficient.
Karl Pearson’s Coefficient of Correlation
denoted by- ‘r’. The coefficient of correlation
‘r’ measure the degree of linear relationship
between two variables say x & y.
∑(xi−xˉ)(yi−yˉ)
r=√∑(xi−xˉ)2∑(yi−yˉ)2
Interpretation of Correlation
Coefficient (r)
The value of Correlation coefficient ‘r’
ranges from -1 to +1
If r=+1, then correlation between two
points indicates a perfect positive
linear correlation
If r=−1, then correlation between two
points indicates a perfect negative
linear correlation
If r=0 then there exist no correlation
between two variables.
Example:
ΣX = 15 | ΣY = 1.1405 |ΣXY = 4.1682 | ΣX² = 55 | ΣY²=0.31538
References:
1. Rastogi V. Fundamentals of
Biostatistics, 2nd ed. New Delhi: Ane
Book Pvt. Ltd.; 2011. pp 212-227.
2. Mukaka M. Statistics Corner: A guide
to appropriate use of Correlation
coefficient in medical research. Malawi
Medical Journal 2012; 24(3). pp 69-71.
3. Taylor R. Interpretation of the
Correlation Coefficient: A Basic Review.
JDMS 1990; 6. pp 35-39.
Limits of Correlation Coefficient
The correlation coefficient lies between -
1 & +1 symbolically (-1 ≤ r ≥ 1).
The correlation coefficient is
independent of the change of origin &
scale.
Value Of ‘R’ Correlation
1.00 Perfect Or Ideal
0.90--0.99 Excellent
0.80--0.89 Very High Correlation
0.60--0.79 High Correlation
0.40--0.49 Medium Correlation
0.20--0.39 Low Correlation
0.0--0.19 Negligible Correlation
0.00 No Correlation
Demerits
1. Tedious Calculations: Calculations of
coefficient of correlations by this
method is long, tedious and time
consuming.
2. Quantitative Measurements: Pearson’s
correlation can only be used for those
attributes which have quantitative
measurements.
Procedure For Computing The
Correlation Coefficient
Calculate the sum of two series ‘∑x’
and ‘∑y’
Square each division of ‘x’ and ‘y’ then
obtain the sum of the squared
deviation i.e. ∑x2 and ∑y2.
Multiply each deviation under x with
each deviation under y & obtain the
product of ‘xy’ then obtain the sum of
the product like x, y i.e. ∑xy.
Substitute the value in the formula.
Pearson’s product-moment
correlation coefficient
This was introduced by Karl Pearson
(1867-1936)
Pearson’s correlation coefficient
between two variables is defined the
covariance of the two variables
divided by the products and their
standard deviation.
Correlation
Auto Insurance cost Auto Value Auto body color
