Set-2

2. What is the different between correlation and regression? What do you

understand by Rank Correlation? When we use rank correlation and when
we use Pearsonian Correlation Coefficient? Fit a linear regression line in the

following data -

X 12 15 18 20 27 34 28 48

Y 123 150 158 170 180 184 176 130

ANSWERE:

Difference between Correlation and Regression

• Correlation Coefficient, R, measures the strength of bivariate

association
•
• The regression line is a prediction equation that estimates the values
of y for any given x

correlation (often measured as a correlation coefficient) indicates the

strength and direction of a linear relationship between two random variables.
Correlation is a measure of association between two variables. The variables
are not designated as dependent or independent.

Correlation
When two social, physical, or biological phenomena increase or decrease
proportionately and simultaneously because of identical external factors, the
phenomena are correlated positively; under the same conditions, if one
increases in the same proportion that the other decreases, the two
phenomena are negatively correlated. Investigators calculate the degree of
correlation by applying a coefficient of correlation to data concerning the
two phenomena. The most common correlation coefficient is expressed as
in which x is the deviation of one variable from its mean, y is the deviation
of the other variable from its mean, and N is the total number of cases in the
series. A perfect positive correlation between the two variables results in a
coefficient of +1, a perfect negative correlation in a coefficient of -1, and a
total absence of correlation in a coefficient of 0. Intermediate values
between +1 and 0 or -1 are interpreted by degree of correlation. Thus, .89
indicates high positive correlation, -.76 high negative correlation, and .13
low positive correlation.

Simple regression is used to examine the relationship between one

dependent and one independent variable. After performing an analysis, the
regression statistics can be used to predict the dependent variable when the
independent variable is known. Regression goes beyond correlation by
adding prediction capabilities.

In statistics, Spearman's rank correlation coefficient or Spearman's rho,

named after Charles Spearman and often denoted by the Greek letter ρ (rho)
or as rs, is a non-parametric measure of correlation – that is, it assesses how
well an arbitrary monotonic function could describe the relationship between
two variables, without making any other assumptions about the particular
nature of the relationship between the variables. Certain other measures of
correlation are parametric in the sense of being based on possible
relationships of a parameterised form, such as a linear relationship

The Spearman rank correlation coefficient can be used to give an R-

estimate, and is a measure of monotone association that is used when the
distribution of the data make Pearson's correlation coefficient undesirable or
misleading.

The Spearman rank correlation coefficient is defined by

where is the difference in statistical rank of corresponding variables, and is

an approximation to the exact correlation coefficient
computed from the original data. Because it uses ranks, the Spearman rank
correlation coefficient is much easier to compute.