Correlation and Regression

  x   y 
Correlation Coefficient – r
 xy  n
r
This tells us the strength of correlation and whether it is a   x  2  2   y  2 
  x 2  
negative or positive correlation
 n 
 y  n 
  
  x   y 
β = Regression Coefficient (y on x) – represents the
 xy  n

slope of the line  x 2
x 2

n
α = Intercept (y on x) – Value of y when x = 0
y    x Regression Equation of y on x y     x
x = Average of x y = Average of y
  yx
  x   y 
β = Regression Coefficient (of x based on y) –
 xy  n

represents the slope of the line  y 2
y 2

n
x    y
α = Intercept – Value of x when y = 0 Regression Equation of x on y: x     y
  xy

The Coefficient of Determination allows us to judge the

Coefficient of Determination = r 2 adequacy of the regression model. It’s a measure of the
variability in y accounted for by y’s linear relationship with x.
Spearman Rank Correlation Coefficient

Mathematics grade 70 92 80 74 65 83
English grade 74 84 63 87 78 90

Firstly, Rank the items, with 1 being the highest and 6 being the lowest, then subtract x from y (y-x) to get d and
square each value.

Mathematics grade 5 1 3 4 6 2
English grade 5 3 6 2 4 1
d 0 2 3 -2 -2 -1 ∑d2
d2 0 4 9 4 4 1 22

Secondly, use Spearman’s Rank Correlation Coefficient r s to assess for Correlation

6 d 2
rs  1 

n n2 1 
Where d represents the difference in ranks and n is the sample size

If extrapolating data outside of the useful range; prediction may be unreliable.

Linearity cannot continue to x = 0

This prediction is biased, as we are extrapolation outside of the useful range as the lowest value was x. We can’t
be sure that this model is accurate at y therefore.
 Curvilinear Regression Transformation Guide

Exponential Function Power Function Reciprocal Function

y  e x y  x  y     x 1
Transform this exponential function Transform this function Transform this function
Get the Natural log ln of both sides Get the log of both sides Get the reciprocal
y  e  x y  x  1
y  

ln y  ln   ln e x
 log y  log x  
 x
ln y  ln    x. ln(e) log y  log   log x    Other possible transformations:
ln y  ln    x log y  log    log x x
ln y  ln    x

Example: Apply a suitable transformation of the exponential function so that Linear Regression techniques can be applied.
  x   ln y 
 x ln y  n
r
Correlation Coefficient – r   x
  x 2  
2
 ln y 2    ln y 
 2


 n   n 
  

  x   ln y 
 x ln y  n
β = Regression Coefficient (of y based on x) – represents the slope of the line 
 x 2
x 2

n
ln y     x
α = Intercept – Value of lny when x = 0 Regression Equation: ln y     x
  ln y   x
ln y  x
Now we need to transform it back from the Natural Log of y lny to y:
y  ex