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Correlation and Regression Analysis

The document discusses correlation and regression analysis using bivariate data. It defines correlation as a relationship between two variables, and explains that the Pearson correlation coefficient r measures the strength of this linear relationship between -1 and 1. A high positive or negative r value indicates a strong linear correlation, while a value close to 0 indicates little to no correlation. Regression analysis uses a straight line to estimate the relationship between two variables based on a sample of paired data points.

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Miguel Xerxes Villacrucis
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490 views18 pages

Correlation and Regression Analysis

The document discusses correlation and regression analysis using bivariate data. It defines correlation as a relationship between two variables, and explains that the Pearson correlation coefficient r measures the strength of this linear relationship between -1 and 1. A high positive or negative r value indicates a strong linear correlation, while a value close to 0 indicates little to no correlation. Regression analysis uses a straight line to estimate the relationship between two variables based on a sample of paired data points.

Uploaded by

Miguel Xerxes Villacrucis
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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CORRELATION AND REGRESSION ANALYSIS

BIVARIATE DATA

The main objective of a correlation is to take a collection of paired sample data (sometimes called bivariate data) and determine whether there appears to be a relationship between two variables. In Statistics, such relationship is referred to as correlation. A correlation exists between two variables when one of them is related to the other in some way.

ASSUMPTIONS The sample of paired (x, y) data is a random sample. The pairs of (x, y) data have a bivariate normal distribution Definition: A scatterplot (or scatter diagram) is a graph in which the paired (x, y) sample data are plotted with a horizontal x axis and a vertical y axis. Each individual (x, y) pair is plotted as a single point.

The linear correlation coefficient r measures the strength of the linear relationship between the paired x and y values in a sample.

(The linear correlation coefficient is sometimes referred to as the Pearson product moment correlation coefficient in honor of Karl Pearson (1857 1936), who originally developed it.)

Formula:

PROPERTIES OF LINEAR CORRELATION COEFFICIENT r The value of r is always between 1.00 and 1.00 inclusive, that is, 1.00 r 1.00 The value of r does not change if all values of either variable are converted to a different scale. The value of r is not affected by the choice of x or y. Interchange all x values and y values and the value of r will not change. r measures strength of a linear relationship. It is not designed to measure the strength of a relationship that is not linear.

Degree of Correlation (r, ) according to Guilford

Numerical 0.00 0.01 0.20 0.21 0.40 0.41 0.70 0.71 0.90 0.91 0.99 1.00

Interpretation: : zero correlation; no relationship : slight correlation; almost negligible relationship : low correlation; definite but small relationship : moderate correlation; substantial relationship : high correlation; high/dependable relationship : very high correlation; very dependable relationship : perfect correlation; perfect relationship

Interpreting the Linear Correlation Coefficient If the absolute value of the computed value of r exceeds the tabled value (in Table A 6), conclude that there is a significant linear correlation. Otherwise, there is not sufficient evidence to support the conclusion of a significant linear correlation.

Question:

The results of your correlation analysis show that you have a correlation of +.8932 between salary and productivity. What do you know? What information is provided by the numeral value of the Pearson correlation?

REGRESSION ANALYSIS

Linear regression is the simplest type of prediction. When we take the observed values of X to estimate or predict corresponding Y values, the process is called simple prediction. Regression is a term used to describe the process of estimating the relationship between two variables. The relationship is estimated by fitting a straight line through the given data.

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