Pearson

Product-Moment
Correlation
Mr. Ian Anthony M. Torrente, LPT
Pearson Product-Moment Correlation
In Statistics, correlation is the interdependence between two variable quantities.
Pearson product-moment correlation is the most widely used in statistics to measure the
degree of the relationship between the linear related variables. The Pearson r correlation
would require both variables to be normally distributed. Correlation refers to the
departure of two variables from independence. For example, in the stock market, if we
want to measure how two products are related to each other, Pearson r correlation is used
to measure the degree of relationship between the two products.

The Pearson r correlation coefficient is defined by using the formula:

  𝑵 ∑ 𝑿𝒀 − ( ∑ 𝑿 )( ∑ 𝒀 )
𝒓=
𝟐 𝟐
√ [ 𝑵 (∑ 𝑿 ) − (∑ 𝑿 ) ][ 𝑵 (∑ 𝒀 ) − (∑ 𝒀 ) ]
𝟐 𝟐
 Pearson Product-Moment Correlation
The following summarizes the correlation coefficient and strength of
relationships:
If the value of r is . . . then it means . . .
0.00 no correlation, no relationship
very low correlation, almost negligible relationship
slight correlation, definite but small relationship
moderate correlation, substantial relationship
high correlation, marked relationship
very high correlation, very dependable relationship
perfect correlation, perfect relationship

When r is: +, direct correlation

-, inverse correlation
Pearson Product-Moment Correlation
How do we use Pearson product-moment correlation? Let us
discuss the steps through an example.
Example: The owner of a chain of fruit shake stores would like to study the
correlation between atmospheric temperature and sales during the summer season.
A random sample of 12 days is selected with the results given as follows:
Day 1 2 3 4 5 6 7 8 9 10 11 12
Temperature 79 76 78 84 90 83 93 94 97 85 88 82
Total Sales 147 143 147 168 206 155 192 211 209 187 200 150
(Units)

Using Pearson Product-Moment Correlation, compute the coefficient of

correlation r and determine the relationship between the atmospheric
temperature and total sales.
 Pearson Product-Moment Correlation
 Solutions: Before you can Day X Y XY
compute for the value of r 1 79 147
6 241 21 609 11 613
(Pearson Product-Moment 22 76
76 143
143
33 78 147
5 776 20 449 10 868
correlation coefficient), 78 147
6 084 21 609 11 466
44 84
84 168
168
construct first the table 7 056 28 224 14 112
55 90
90 206
206
showing the columns for 6 83 155 8 100 42 436 18 540
variables X, Y, , , and XY. Then, 6 83 155
7
7
93
93
192
192
6 889 24 025 12 865
find , , , , and . 8 94 211 8 649 36 864 17 856
8 94 211
9 97 209 8 836 44 521 19 834
9 97 209
10 85 187 9 409 43 681 20 273
10 85 187
11 88 200
11 88 200 7 225 34 969 15 895
12 82 150
12
Total 82 150 7 744 40 000 17 600
Total  1 029 2 115 6 724
380 887 22 500
183 222 12 300
 Pearson Product-Moment Correlation
 
Solutions: Compute for the value of r (Pearson-moment correlation coefficient).
 

The coefficient of correlation, r = 0.93, between the atmospheric

0.93 temperature and total sales indicates a very high positive correlation
(very dependable relationship) – that is an increased in atmospheric
temperature is highly associated with the increased in total sales of
fruit shake.
 Pearson Product-Moment Correlation
The following summarizes the correlation coefficient and strength of
relationships:
If the value of r is . . . then it means . . .
0.00 no correlation, no relationship
very low correlation, almost negligible relationship
slight correlation, definite but small relationship
moderate correlation, substantial relationship
high correlation, marked relationship
very high correlation, very dependable relationship
perfect correlation, perfect relationship

When r is: +, direct correlation

-, inverse correlation
 Pearson Product-Moment Correlation
How do we use Pearson product-moment correlation? Let us
discuss the steps through an example.
Example 2: Listed below are the heights in cm and weights in kilograms of six teachers.
Solve for the Pearson Product Correlation Coefficient.

TEACHER 1 2 3 4 5 6
Height (in cm) 160 162 167 158 167 170
Weight (in kg) 50 59 63 52 65 68

Using Pearson Product-Moment Correlation, compute the coefficient of

correlation r and determine the relationship between the atmospheric
temperature and total sales.
 Pearson Product-Moment Correlation
 Solutions: Before you can Day X Y XY
compute for the value of r 1 160 50 25600 2500 8000
(Pearson Product-Moment 22 162
162 159
159 26244
26244 3481
3481 9558
9558
correlation coefficient), 33 167
167 63
63 27889
27889 3969
3969 10521
10521
44 158
158 52
52 24964
24964 2704
2704 8216
8216
construct first the table
55 167
167 65
65 27889
27889 4225
4225 10855
10855
showing the columns for 6 170 68 28900 4624 11560
variables X, Y, , , and XY. Then, 6 170 68 28900 4624 11560
Total 984 357 161486 21503 58710
find , , , , and . Total 984 357 161486 21503 58710
 Pearson Product-Moment Correlation
 

  Solutions: Compute for the value of r (Pearson-moment correlation coefficient).

The coefficient of correlation, r = 0.93, between the atmospheric

temperature and total sales indicates a very high positive correlation
0.96 (very dependable relationship) – that is an increased in atmospheric
temperature is highly associated with the increased in total sales of
fruit shake.
We have reached the end of discussion.
Is there anything that you would like to
be clarified? Would you like to add some
insights in this discussion? If there’s none,
prepare yourselves for an offline task.