Correlation Analysis

CORRELATION
Correlation is a statistical technique that can show whether and how strongly pairs of variables are related

Correlation is used to measure and describe a relationship between two variables. Usually these two variables are simply observed as they exist in the environment; there is no attempt to control or manipulate the variables.

CORRELATION COEFFICIENT
The correlation coefficient measures two characteristics of the relationship between X and Y: STRENGTH OF THE RELATIONSHIP IS DETERMINED BY THE CLOSENESS OF THE POINTS TO A STRAIGHT LINE WHEN A PAIR OF VALUES ARE PLOTTED ON A GRAPH DIRECTION IS DETERMINED BY WHETHER ONE VARIABLE GENERALLY INCREASES OR DECREASES WHEN THE OTHER VARIABLE INCREASES

PROPERTIES OF CORRELATION COEFFICIENT

It is pure number and is independent of the units of measurement. It lies between 1 and +1

Degree of Correlation
Perfect correlation Limited degrees of correlation Absence of correlation

TYPES OF CORRELATION

i. Positive and Negative ii. Simple, partial and multiple iii.Linear and non-linear

Positive Correlation
If the higher scores on X are generally paired with the higher scores on Y, and the lower scores on X are generally paired with the lower scores on Y, then the direction of the correlation between two variables is positive

Negative Correlation
If the higher scores on X are generally paired with the lower scores on Y, and the lower scores on X are generally paired with the higher scores on Y, then the direction of the correlation between two variables is negative.

MULTIPLE & PARTIAL CORRELATION

X1-Yield of rice X2-Amount of Rainfall X3-Amount of fertilizers X4-Type of soil X5-Advanced technologies used.

Correlation analysis of X1,X2,X3,X4 and X5 is an example of Multiple Correlation whereas if we only study the the the relation between X1 and X2 it would be an example of Partial Correlation

Linear and Non-linear

The nature of the graph gives us the idea of the linear type of correlation between two variables. If the graph is in a straight line, the correlation is called a "linear correlation" and if the graph is not in a straight line, the correlation is non-linear or curvi-linear.

Methods Of Determining Correlation

Scatter Plot Karl Pearsons coefficient of correlation Spearmans Rank-correlation coefficient.

Scatter Plot ( Scatter diagram or dot diagram )

In this method the values of the two variables are plotted on a graph paper. One is taken along the horizontal ( (x-axis) and the other along the vertical (y-axis). By plotting the data, we get points (dots) on the graph which are generally scattered and hence the name Scatter Plot. The manner in which these points are scattered, suggest the degree and the direction of correlation.

Karl Pearsons coefficient of correlation

It gives the numerical expression for the measure of correlation. it is noted by r . The value of r gives the magnitude of correlation and sign denotes its direction. Formula for coefficient of correlation written on white board

E.G. ( CALCULATION OF KARL PEARSONS COEFFICIENT OF CORRELATION)

CALCULATE THE KARL PEARSONS COEFFICIENT OF CORRELATION FROM THE FOLLOWING DATA

X
y

100 200 300 400 500 600 700

30 50 60 80 100 110 130

x 100
200 300

dx

dx

y 30
50 60

dy

dy

dx.dy

400
500 600 700

80
100 110 130

E.G. (KARL PEARSONS COEFFICIENT OF CORRELATION)

A COMPANY GIVES ON THE JOB TRANING TO ITS SALESMEN,FOLLOWED BY A TEST. IT IS CONSIDERING WHETHER IT SHOULD TERMINATE THE SERVICES OF ANY SALESMAN WHO DOES NOT DO WELL IN THE TEST. FOLLOWING DATA GIVE THE TEST SCORES AND SALES (IN 1000 Rs ) MADE BY NINE SALES MEN DURING LAST ONE YEAR. COMPUTE COEFFICIENT OF CORRELATION BETWEEN TEST SCORES & SALES. DOES IT INDICATE TERMINATION OF SERVICES OF SALESMEN WITH LOW SCORES IS JUSTIFIED.

TEST SCORES (X) 14 19 24 21 26 22 15 20 19

dx

dx

SALES ( in 1000 Rs) (Y) 31 36 48 37 50 45 33 41 39

dy

dy

dx.dy

Spearmans rank Correlation

This method is applied to measure the association when only THE ORDINAL OR RANK DATA is available In other words this method is applied in a situation in which quantitative measures of certain qualitative factors such as judgement, TV programs, color etc cannot be fixed but observations can be arranged in a definite order. We start with rank 1 for either in terms of quantity or quality. Formula for coefficient of correlation WRITTEN ON WHITE BOARD

E.G. ( SPEARMANS COEFF OF CORRELATION)

THE RANKING OF 10 STUDENTS IN ACCORDANCE WITH THEIR PERFORMANCE IN TWO SUBJECTS A & B ARE GIVEN BELOW. CALCULATE RANK CORRELATION COEFFICIENT

A 6 5 3 10 2 4 9 7 8 1 B 3 8 4 9 1 6 10 7 5 2

RANK 1 (R1) 6 5 3 10 2 4 9 7 8 1

RANK 2 d= R1-R2 (R2) 3 8 4 9 1 6 10 7 5 2

E.G. ( SPEARMANS COEFFICIENT OF CORRELATION)

CALCULATE SPEARMA NS COEFF OF CORRELATION BETWEEN MARKS ASSIGNED TO TEN STUDENTS BY JUDGES X & Y IN A CERTAIN COMPETITIVE TEST
STUDENT 1 2 3 4 5 6 7 8 9 10 MARKS BY JUDGE X 52 53 42 60 45 41 37 38 25 27 MARKS BY JUDGE Y 65 68 43 38 77 48 35 30 25 50

MARKS RANK 1 BY JUDGE X 52

MARKS RANK 2 BY JUDGE Y 65

d=R1-R2 d

53 42 60 45 41 37 38 25 27

68 43 38 77 48 35 30 25 50

Thank you