Correlation Coefficient Examples

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Given below are some examples to calculate correlation.
Solved Example
Question:
To determine the correlation value for the given set of X and Y values:
X ValuesY Values
21
2.5
23
3.1
37
4.2
19
5.6
24
6.4
33
8.4
Solution:
Let us count the number of values.
N=6
Determine the values for XY, X2, Y2
X Value Y Value X*Y
X*X
Y*Y
21
2.5
52.5
441
6.25
23
3.1
71.3
529
9.61
37
4.2
155.4
1369 17.64
19
5.6
106.4
361
31.36
24
6.4
153.6
576
40.96
33
8.4
277.2
1089 70.56
Determine the following values X , Y , XY , X2 , y2.
X=157
Y=30.2
XY=816.4
X2=4365
Y2=176.38
Correlation (r) = NXY(X)(Y)[NX2(X)2][NY2(Y)2]

= 157(1541)(146.24)
(r)=0.33
Correlation Analysis
Correlation is a term that refers to the strength of a relationship between two
variables. Correlation and regression analysis are related in the sense that both deal
with relationships among variables. The correlation coefficient is a measure of
linear association between two variables. Values of the correlation coefficient are
always between -1 and +1. The value of -1 represents a perfect negative correlation
while a value of +1 represents a perfect positive correlation. A value of 0 means that
there is no relationship between the variables being tested.
Interpretation of coefficient of correlation based on the error likely
1. If the coefficient of correlation is less than the error likely, then its not
significant
2. If the coefficient of correlation is more than six times the error likely, it is
significant.
3. If the error is too small and coefficient of correlation is 0.5 or more then the
coefficient of correlation is significant.

Computing Pearson's Correlation Coefficient

The formula for Pearson's correlation takes on many forms. A commonly used
formula is shown below. The formula looks a bit complicated, but taken step by step
as shown in the numerical example, it is really quite simple.

Pearson Correlation Coefficient

The Pearson Correlation Coefficient is a very helpful statistical formula that
measures the strength between variables and relationships. In the field of statistics,
this formula is often referred to as the Pearson R test. When conducting a
statistical test between two variables, it is a good idea to conduct a Pearson
Correlation Coefficient value to determine just how strong that relationship is
between those two variables.
Formula
In order to determine how strong the relationship is between two variables, a
formula must be followed to produce what is referred to as the coefficient value.
The coefficient value can range between -1.00 and 1.00. If the coefficient value is in
the negative range, then that means the relationship between the variables is
negatively correlated, or as one value increases, the other decreases. If the value is
in the positive range, then that means the relationship between the variables is
positively correlated, or both values increase or decrease together. Let's look at the
formula for conducting the Pearson Correlation Coefficient value.
Step 1: First, you make a chart with your data for two variables, labeling the
variables (x) and (y). Then you must add 3 more columns labeled (xy), (x^2), and
(y^2). A simple data chart might look like this:
Person----------Age (x)----------Score (y)----------(xy)----------(x^2)----------(y^2)
1
2
3
(More data would be needed, but only 3 samples are shown above for purposes of
example)
Step 2: Then you complete the chart using basic multiplication of the variable
values.
Person----------Age (x)----------Score (y)----------(xy)----------(x^2)----------(y^2)
1-----------------20-----------------30-------------------600----------400-----------900
2-----------------24-----------------20-------------------480----------576-----------400
3-----------------17-----------------27-------------------459----------289-----------729
Step 3: After you have multiplied all the values to complete the chart, as shown
above, next you will add up all the columns from top to bottom.
Person----------Age (x)----------Score (y)----------(xy)----------(x^2)----------(y^2)
1-----------------20-----------------30-------------------600----------400-----------900
2-----------------24-----------------20-------------------480----------576-----------400
3-----------------17-----------------27-------------------459----------289-----------729

Total------------61-----------------77-------------------1539--------1265----------2029
Step 4: Then, you will use the following formula to find the Pearson Correlation
Coefficient value.

Pearson Correlation Coefficient Formula

Step 5: Once you complete the formula above by plugging in all the correct values,
the result is your coefficient value! If the value is a negative number, then there is a
negative correlation of relationship strength, and if the value is a positive number,
then there is a positive correlation of relationship strength. Note - The above
examples only show data for 3 people, but the ideal sample size to calculate a
Pearson Correlation Coefficient should be more than 10 people.

Mean Formula
Mean or Arithmetic mean is not only a fundamental concept but a very important
concept covered in statistics. Mean is the mathematical average for the set of
numbers.
Mean formula is derived as shown below:
The mean of a series is the quotient obtained by dividing the sum of the values by
the number of items.
If x1,x2,.......xn are the N values of a variate X, then the Arithmetic Mean (X) is
defined as the quotient of the sum of the values divided by their number .
Symbolically,

X = 1N[x1+x2+......+xn] = XN
Mean = XN
Where,
X = Values of the variables
= Total of the values and read as summations
N = Number of items.
Let us solve some simple examples to understand mean:
Solved Examples
Question 1: The following table gives the monthly income of 10 families in a town.
Family
Daily Income in
dollars

A B C D E

FG H I J

30 70 10 75 500 8 42 250 40 36

Calculate the average income per month.

Solution:
Computation of Arithmetic Average
Familie
s
A
B
C
D
E
F
G
H
I
J
N = 10

Income(X) in
dollars
30
70
10
75
500
8
42
250
40
36
X = 1061

X = XN = 106110 = 106.10 dollars

Question 2: Eight coins were tossed together and the number of heads resulting
was observed. The operation was performed 256 times and the frequencies that
were obtained for the different values of X, the number of heads are shown in the
following table:
X
012 3 4 5 6 78
Frequency 1 9 26 59 72 52 29 7 1
Find out the arithmetic mean.
Solution:
Computation of arithmetic average.
X
Frequency(f) fX
01
19
2 26
3 59
4 72
5 52
6 29
77
81

0
9
52
177
288
260
174
49
8

X = (fx)N = 1017256 = 3.97

Question 3: Calculate the arithmetic mean of the following.

Marks obtained Number of students
0-9
9
10 - 19
42

20 - 29
30 - 39
40 - 49
50 - 59
60 - 69
70 - 79
80 - 89

61
140
250
102
71
23
2

Solution:
Computation of the average marks of students.
Marks f
0-9 9
10 - 19 42
20 - 29 61
30 - 39 140
40 - 49 250
50 - 59 102
60 - 69 71
70 - 79 23
80 - 89 2
N = f =
700

Mid value of
marks(m)
4.5
14.5
24.5
34.5
44.5
54.5
64.5
74.5
84.5

fm
40.50
607.90
1494.50
4830.00
11125.00
4559.00
4579.50
1713.50
169.00
fm =
30100

X = fmN = 30100700 = 43 marks

Properties of Mean
Properties of mean helps in making the calculation simpler. Let us discuss some
properties of mean:
1) The sum of the deviations of the values in the variable from their mean is zero.
fi(xix)=fixixfi=0

2) If X and Y are the arithmetic mean of 2 series of N observations each, then the
corresponding terms of the 2 series are added. It is to be noted that the total number
of observations in each series is constant. Then, their arithmetic mean is:
Z = X+Y
3) The sum of the squared deviations of the items from the mean is minimum,
which is less than the sum of the squared deviations of the items from any other
values.
4) If each of the items in the series is replaced by the mean, the sum of these
substitutions will be equal to the sum of individual items.
5) The product of the arithmetic mean and the number of items gives the total of all
items.
xN=xi.
Mean Value
Mean value can be easily calculated and determined in every case. It is capable of
algebraic manipulation as it is a computed average. The average of two or more
series can be obtained from the averages of two or more series. Another merit,
which is not shared by other average, lies in the fact that it gives weight to all items
in direct proportion to their case.
Finding Mean Value
Let us see with the help of examples, how to find the mean value from given data.
Solved Examples
Question 1: Estimate the mean value for the following set of data
x
11
12
14
16
19
p(x)

0.14

0.15

0.16

0.32

0.23

Solution:
The formula used to estimate the mean value for discrete variable is

Mean value = xp(x)

Mean value = 11(0.14) + 12(0.15) +14(0.16) +16(0.32) + 19(0.23)
Mean value = 1.54 + 1.8 + 2.24+ 5.12 + 4.37
Mean value = 15.07
The mean value for given a discrete variable is 15.07.
Question 2: Estimate the mean value for the following set of data.
x

10

20

50

70

80

p(x)

0.13

0.22

0.14

0.33

0.18

Solution:
The formula used to estimate the mean value for a discrete variable is
Mean value = xp(x)
Mean value = 10(0.13) + 20(0.22) +50(0.14) +70(0.33) + 50(0.18)
Mean value = 1.3 + 4.4+ 7+ 23.1+ 14.4
Mean value = 50.2
The mean value for the given discrete variable is 50.2.

Question 3: Estimate the mean value for the following set of data.
x

12

17

p(x)

0.18

0.23

0.21

0.25

0.13

Solution:
The formula used to estimate the mean value for a discrete variable is
Mean value = xp(x)
Mean value = 1(0.18) + 5(0.23) +8(0.21) +12s0.25) + 17(0.13)
Mean value = 0.18+ 1.15 + 1.68+ 3 + 2.21
Mean value = 8. 22
The mean value for a given discrete variable is 8.22.

Sample Mean
A sample mean of a numerical set that includes an average of only a portion of the
numbers within a group. The sample mean X from a group of observations is an
estimate of the population mean .
For the sample size N, consider n independent random variables {X1,X2,...,Xn},
each corresponding to one randomly selected observation. Each of these variables
has the distribution of the population, with mean and standard deviation .
The sample mean is defined to be
X = 1N(X1+X2+.............+Xn).
Sample Mean Formula
Sample Mean = XN
Where,
X = Values of the variables

 = Total of the values and read as summations

N = Number of items.
Harmonic Mean
Harmonic mean is used to calculate the average of a set of numbers. Harmonic
mean is the ratio of number of the given values and sum of the reciprocals of the
given values. Like arithmetic mean and geometric mean, harmonic mean is also
useful for quantitative data. The harmonic mean is always the lowest mean.
For the sample size N, if X1,X2,X3,................,Xn are the observed values then the
harmonic mean of the observed sample is defined as:
Harmonic Mean
H = Nni=11xi

Weighted Mean
Weighted Mean is an average computed by giving different weights to some of the
individual values. If all the weights are equal, then the weighted mean is the same
as the arithmetic mean.
The weighted mean for given set of non negative data, X = x1,x2,x3,............,xn with
non negative weights, W = w1,w2,w3,.............,wn can be derived from the formula:
Weighted Mean
xw = w1x1+w2x2+...............+wnxnw1+w2+.......+wn
xw = WXW
Where,
xw = Weighted arithmetic mean
x = Values of the items
w = Weight of the item .

Mean Deviation
Deviation is a measure of difference between the observed value and the mean.
Mean deviation, the average of the absolute values of the differences between
individual numbers and their mean. The mean deviation or the average deviation is
defined as the mean of the absolute deviations of observations from some suitable
average which may be the arithmetic mean, the median or the mode.
The mean deviation (MD) is given by the relation:
Mean Deviation = |XX|N