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    Correlation Analysis

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    JoseMelarte GoocoJr.

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    © All Rights Reserved
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    Correlation Analysis

    Uploaded by

    JoseMelarte GoocoJr.
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    Download as pptx, pdf, or txt
    11 views14 pages

    Correlation Analysis

    Uploaded by

    JoseMelarte GoocoJr.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 14

    Correlation

    Analysis

    By

    Jerome L. Buhay
    What is correlation?

    – Correlation is a measure of the direction and strength of


    linear relationship between two variables.
     Direction means positive or negative.
     Strength can be perfect, strong or high, moderate, low or
    zero or none correlation.
    – Correlation between two variables does not prove X
    causes Y or Y causes X.
    What is Correlation?

    Characteristics of a Relationship:
    Direction
    Positive  As X goes up, Y goes up; variables “move” in
    same direction
    Negative  As X goes up, Y goes down; variables “move” in
    different directions
    What is correlation?

    – Degree/Strength and Direction of Relationship


     How well do the data fit a specific form?

     Typically look for how well data fit a straight line.


     Scatter diagram is an illustrative way to determine the strength
    and direction of relationship.
     Pearson Correlation Coefficient is a numerical measure that can
    also be used to determine strength and direction of relationship.
    Scatter diagram
    Scatter diagram
    Scatter diagram
    Pearson correlation coefficient r

    Symbol: r
    r can range from -1.0 to +1.0
    Sign (+/-) indicates “direction”
    Value indicates “strength”
    Measures a “linear” relationship only
    Pearson correlation coefficient r

    Direction of relationship between X, Y


     Positive (+r) = As X goes up, Y goes up
     Negative (-r) = As X goes up, Y goes down
    Strength of a relationship between X, Y
     Closer to  1.0, stronger
     Closer to 0, weaker
     when r = 0  X,Y relationship not defined by a straight line/no
    linear correlation
    Pearson correlation coefficient r

    Illustration:
    -1 0 1
    Perfect Negative No/Zero Perfect Positive
    Correlation Correlation Correlation

     Closer to 0 = weaker
     Closer to 1.0 = stronger
     r close to 1.0 perfect
     r  0 could mean many things:
     No relationship at all between X & Y
     Non-linear relationship between X & Y
     Restricted range on X and/or Y
     Outlier may be causing problems
    Pearson correlation coefficient r

    Computational Formula:
    r=
    Correlation vs. Causality:

    1. Correlation tells you two variables are related


    2. Does NOT tell you why!!
    3. Do not draw causal inferences from a correlation
    X  Y ,Y  X
    examples:
     r = -0.60 #friends, depression
    Does being depressed cause you to not have friends? Or does not having
    friends cause you to be depressed?
     r = +0.55 hours studying, grades
    Do people who get good grades study more? Or does studying more lead to
    good grades?
    Example Computing r

    HOURS SCORE
    STUDENT (X) (Y) X2 Y2 XY
    A 1 1 1 1 1
    B 1 3 1 9 3
    C 3 2 9 4 6
    D 4 5 16 25 20
    E 6 4 36 16 24
    F 7 5 49 25 35
    G 8 7 64 49 56
    H 8 8 64 64 64

    X = 38 Y = 35 X2=240 Y2=193 XY= 209


    Interpreting Correlation (Evans, 1996)

    Interpreting r
    r Verbal Interpretation
    -1 Perfect Negative Correlation
    -0.8 to -0.99 Very Strong Negative Correlation
    -0.6 to -0.79 Strong Negative Correlation
    -0.4 to -0.59 Moderate Negative Correlation
    -0.2 to -0.39 Weak Negative Correlation
    -0.01 to -0.19 Very Weak Negative Correlation
    0 No Correlation
    0.01 to 0.19 Very Weak Positive Correlation
    0.2 to 0.39 Weak Positive Correlation
    0.4 to 0.59 Moderate Positive Correlation
    0.6 to 0.79 Strong Positive Correlation
    0.8 to 0.99 Very Strong Positive Correlation
    1 Perfect Positive Correlation

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