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Table of Content
Purpose of correlation Independent and dependent variables Correlation coefficient Range of correlation coefficient Formula for correlation coefficient Example for correlation coefficient Possible relationships between variables
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PURPOSE OF CORRELATION
Correlation determines whether values of one variable are related to another.
be controlled or manipulated. Its values are predicted from the independent variable.
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Example
Independent variable in
this example is the number of hours studied. The grade the student receives is a dependent variable. The grade student receives depend upon the number of hours he or she will study. Are these two variables related?
% Grade
82
B
C D
2
1 5
63
57 88
E
F
3
2
68
75
7
Scatter Plot
The independent and dependent can be plotted on a graph called a scatter plot.
By convention, the independent variable is
plotted on the horizontal y-axis. The dependent variable is plotted on the vertical x-axis.
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Correlation Coefficient
The correlation coefficient computed from the sample data measures the strength and direction of a relationship between two
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Correlation = +1
Dependent variable
25 20 15 10 12 14 16 18 20 Independent variable
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Correlation = -1
Dependent variable
25 20 15 10 12 14 16 18 20 Independent variable
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Correlation = 0
Dependent variable
30 25 20 15 10 0 2 4 6 8 10 12 Independent variable
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Correlation = 0
Dependent variable
30 20 10 0 0 2 4 6 8 10 12 Independent variable
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Where n is the number of data pairs, x is the independent variable and y the dependent variable.
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example. Using the data on age and blood pressure, lets calculate the x, y, xy, x2 and y2.
C D
E F Sum
56 61
67 70 345
135 143
141 152 819
7560 8723
9447
3136 3721
4489
18225 20449
19881 23104 112443
16
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Interpretation
The correlation is 0.9
There is a strong positive relationship
Blood Pressure
Age 0.90
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consumption causes nervousness as well nervous people have more coffee. Relationship caused by third variable; Death due to drowning and soft drink consumption during summer. Both variables are related to heat and humidity (third variable).
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Test of Correlation
Null hypothesis: correlation is zero
Test statistic is t = r [(n-2)/(1-r2)]0.5 The statistic is distributed as Student t
distribution with n-2 degrees of freedom Excel does not calculate this statistic and you can manually calculate it
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Values range between 1 and +1 and measure the strength and direction of the relationship.
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