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Correlation and Examples

Correlation measures the strength and direction of the relationship between two variables. Positively correlated variables increase or decrease together, while negatively correlated variables move in opposite directions. Pearson's correlation coefficient quantifies the correlation, ranging from -1 (perfect negative correlation) to 1 (perfect positive correlation). It is calculated in Excel by selecting the Pearson function after entering two sets of paired data. Scatter plots can visualize the correlation by graphing one variable on each axis, but the coefficient provides a numerical measure of the correlation strength and significance.

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35 views

Correlation and Examples

Correlation measures the strength and direction of the relationship between two variables. Positively correlated variables increase or decrease together, while negatively correlated variables move in opposite directions. Pearson's correlation coefficient quantifies the correlation, ranging from -1 (perfect negative correlation) to 1 (perfect positive correlation). It is calculated in Excel by selecting the Pearson function after entering two sets of paired data. Scatter plots can visualize the correlation by graphing one variable on each axis, but the coefficient provides a numerical measure of the correlation strength and significance.

Uploaded by

Sana
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Correlation

Correlation measures the association of the strength


of the relationship between two variables say x and y.
Types of Correlation
• When a variable increases while the other decreases, these
variable are indirectly correlated or negatively correlated.

• But when one variable increases and the other increases as


well or one variable decreases, as well as the other variable,
then the two variables are directly correlated or positively
correlated.
To find the correlation coefficient of data in the succeeding
examples 1, 2, and 3 in Excel, simply follow the steps below.
Steps 1: Enter all data in Excel in two columns or rows.
Steps 2: Click “Formulas” then “Statistical” and choose
“Pearson”.
Steps 3: After function argument tables appears, place the
cursor in array 1, then highlight the first column of
your data.
Steps 4: Place the cursor in array 2 of the function argument
table, then highlight the second column of your data.
Steps 5: The correlation coefficient is -0.008090869 as
shown in the succeeding slide.
Example 1
Suppose a ten-item test in English and a ten-item test
in Mathematics were administered to ten students. The
scores of the students are tabulated as follows. It must
be determined if the scores in the Mathematics quiz
(here labelled variable x) and the English test (labelled
y) are correlated or not.
Example 1
Students Mathematics score (x) English scores (y)
1 4 5
2 5 4
3 9 8
4 2 3
5 8 9
6 1 2
7 2 1
8 7 6
9 6 7
10 4 5
The scatter graph of the previous data is given in the
next slide. Note that the x-axis represents the scores in
Mathematics and y-axis shows the scores in English.
Each point in the graph below is an ordered pair (x,y)
corresponding to the score obtained by a student in the
two subjects.
The scatter diagram of the data of example 1 using MS Excel.

The graph above indicates a direct correlation between variables of x and y which
appears to be increasing.
Example 2: Suppose the scores of the students in
those two subjects happen to be as follows
Students Mathematics scores (x) English scores (y)
1 9 3
2 3 6
3 4 7
4 7 4
5 6 2
6 1 9
7 2 8
8 5 4
9 10 2
10 2 10
The scatter graph of the data of example 2 using MS Excel.

The trend of the data is decreasing, hence, variables are negatively correlated
Example 3: Suppose same students have the
following scores
Students Mathematics score (x) English scores (y)
1 2 2
2 5 5
3 3 6
4 6 3
5 8 4
6 2 9
7 9 8
8 3 7
9 6 7
10 4 7
The scatter diagram of the data of example 3
using MS Excel.

This graph represents a zero correlation.


Definitions

• Two variables are positively correlated if the values of the


two variables both increase or both decrease.

• Two variables are negatively correlated if the values of one


variable increase while the values of the other decrease.

• Two variables are not correlated or they have zero


correlation if one variable neither increases nor decreases
while the other increases.
Pearson Product Moment Correlation
Formula
Using MS Excel and the steps provided above in
calculating the coefficient correlation, the
following tables show the results and its
interpretation.
The computed correlation coefficient is almost 1,
hence, it has a strong positive correlation.
The absolute value of the correlation coefficient is almost
1, hence, it has a strong negative correlation.
Since the value is almost zero, then it has little
or zero linear correlation.
Scatter Plot or Scatter Diagram – Graph of
correlation
A scatter plot may be a convenient way of inspecting correlation
between two variables, it does not offer a measure of the strength
of a correlation. It shows a rough estimation of the degree or
strength of the correlation between two variables.
Karl Pearson invented a formula that can give a numerical value to
the measure of a correlation. This formula does not only show
how greatly two data sets are correlated but also reveals if the
correlation is direct or inverse, or if the data sets are not
correlated. The formula named after him is called the Pearson
product-moment correlation.
The Pearson product-moment correlation is only
applicable when the two variables under study
are interval type of data. However, when the type
of data is not measured on an interval scale then
the Pearson product-moment correlation will not
be appropriate.

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