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# Correlation.ppt

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# Correlation.ppt

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### Correlation.ppt

1. 1. February 6, 2023 Orientation Course 1 Correlation
2. 2. February 6, 2023 Orientation Course 2 Agenda n Definition n Examples n Types of Correlation n Methods of Simple Correlation n Limitations
3. 3. February 6, 2023 Orientation Course 3 Definition n Statistical tool which helps to study the relationship between two or more variables n The technique which is used to measure the closeness of the relationship between the variables
4. 4. February 6, 2023 Orientation Course 4 Examples n Age, Weight & Height n Family Income & Expenditure on Luxury items n Price, Supply & Demand n Optimum Increase in Rainfall & Production of Rice
5. 5. February 6, 2023 Orientation Course 5 Types of Correlation Correlation Simple (Two Variables) Multiple & Partial (More than 2 Variables)
6. 6. February 6, 2023 Orientation Course 6 Methods of Simple Corr. n Scatter Diagram n Karl Pearson’s Coefficient of Correlation n Rank Correlation
7. 7. February 6, 2023 Orientation Course 7 Scatter Diagram n Gives an idea of relationship n More scattered less the degree of relationship n More nearer more the degree of relationship
8. 8. February 6, 2023 Orientation Course 8 Scatter Diagram (Contd..) Merits n Easy to understand n Not influenced by the size of extreme values n First step in investing the relationship between the variable Limitations n The exact degree of correlation cannot be measured
9. 9. February 6, 2023 Orientation Course 9 Karl Pearson‘s Method n Assumptions § There is linear relationship between variables § The variables are affected by independent causes so as to form normal distribution § The two variables are casually independent
10. 10. February 6, 2023 Orientation Course 10 Karl Pearson‘s Method (Cont..)    2 2 2 2 ) , ( ) , ( y n y x n x y x n y x y x Cov y x y x Cov r i y i x i i               n x x i   n Formula n y y i  
11. 11. February 6, 2023 Orientation Course 11 Karl Pearson‘s Method (Cont..) n Xi is the ith value of the variable x n Yi is the ith value of the variable y n Mean of X n Mean of y n Standard deviation of x n Standard deviation of y x y x  y 
12. 12. February 6, 2023 Orientation Course 12 Age Weight 1 2 3 4 5 6 7 8  i x  i y  2 i x  2 i y  i i y x xy 2 y 2 x   x   y
13. 13. February 6, 2023 Orientation Course 13  i x  i y  2 i x  2 i y  i i y x ) , ( y x Cov x  y  Karl Pearson‘s Method (Cont..) r
14. 14. February 6, 2023 Orientation Course 14 Karl Pearson‘s Method (Cont..) n r lies between + 1 n r = +1 Perfect Positive Correlation n r = -1 Perfect Negative Correlation n r = 0 No relationship