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0 Correlation 2
1 and 3
Regression
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Correlation
• The extent (degree) of the linear relationship between two
variables is called correlation.
• Correlation analysis is a statistical tool, that measures the
closeness or strength of the relationship between the
variables.
• In correlation, two variables are inter-independent or co-vary
and we cannot make distinction between the independent and
dependent variables.
Types of Correlation
[Link] and Negative Correlation
2. Simple, Partial, and Multiple Correlation
[Link] and Non-Linear
Positive Correlation
• This correlation is called direct
correlation.
• In this, an increase or decrease
in the value of one variable is
associated with the increase or
decrease in the value of other.
• In this, both variables move in
the same direction.
Negative Correlation
• In this, increase in one variable
causes the proportionate
decrease in the other variable.
• Here the two variables move in
the opposite direction.
Types of Correlation
1. Simple:
In this, only two variables are involved. and these two
variables are taken into consideration at a time.
2. Partial Correlation:
• Relationship between three or more variables is studied.
• In this type, only two variables are taken into
consideration and other variables are excluded.
Multiple Correlations
• In this three or more variables are studied
simultaneously.
• However multiple correlations consist of measurements
of relationships between a dependable variable and two
or more independent variable.
• Partial and multiple correlation are mainly associated
with multivariate analysis.
Linear Correlation
• Linear and non-linear
correlation:
Difference between
these two is based on
the ratio of change
between the variables
under study.
Non-Linear Correlation
The amount of
change in one
variable doesn't
have a constant
ratio to the
change in other
related variable.
Measures of Correlation
• Measures of correlation: There are several
measures of correlation but following three
are important measures.
1. Scatter diagram
2. Correlation coefficient
Scatter Diagram
• This is the simplest method for confirming whether there is any
relationship between two variables by plotting values on chart or
graph.
• It is nothing but a visual representation of two variables by points
(dots) on a graph.
• In a scatter diagram one variable is taken on the X-axis and other on
the Y-axis and the data is represented in the form of points.
• It is called as a scatter diagram because it indicates scatter of various
points (variables).
Scatter Diagram
• Scatter diagram gives a general idea about
existence of correlation between two variables
and type of correlation, but it does not give
correct numerical value of the correlation.
• Depending on the extent of relationship between
two variables, scatter diagrams shows perfect
correlation, perfect negative correlation, but it
does not give correct numerical value of the
correlation.
• Depending on the extent of relationship between
two variables, scatter diagrams shows perfect
correlation, perfect negative correlation, no
correlation, high positive and high negative
correlation.
Correlation Coefficient
• Scattered diagram and graphic method only gives a
rough idea about the relationship between two variables
but does not give numerical measure of correlation.
• The degree of relationship can be established by
calculating Karl Pearson's coefficient, which is denoted
by "r'
• Definition: The coefficient of correlation 'r' can be
defined as a measure of strength of the linear
relationship between the two variables X and Y.
Regression
• This term was first used by Sir Francis Galton to describe the laws of human
inheritance.
• Regression describes the liner relationship in quantitative terms.
• It is used to make predictions about one variable based on our knowledge of the
other.
• The regression is divided into two categories i.e. simple regression and multiple
regressions.
• The simple regression is concerning with two variables while multiple regression is
concerning with more than two variables.
• Simple regression is further classified into linear and non-linear type regression.
Regression
• Linear regression is one in which some change in dependent variable
can be expected for the change in independent variable (X), irrespective
of the values of (Y).
• In studying the way in which the yield of wheat vary in relation to
change the amount of fertilizer applied, yield is dependent variable (Y)
and fertilizer level is independent variable (X).
• The starting point in regression is to illustrate the relationship between
the dependent variable (weight) and independent variable (age) by
scatter diagram.
Regression Analysis
• Regression analysis is widely used for prediction and
forecasting.
• It is also used to understand which among the
independent variables are related to the dependent
variable, and to explore the forms of these relationships.
• In restricted circumstances, regression analysis can be
used to infer causal relationships between the
independent and dependent variables.
Linear Regression
• In statistics linear regression includes any approach to modelling the
relationship between a scalar variable y and one or more variables
denoted X, such that the model depends linearly on the unknown
parameters to be estimated from the data.
• Such a model is called a "linear model".
• Linear regression has many practical applications.
• This is because models that depend linearly on their unknown
parameters are easier to fit than models which are non-linearly related
to their parameters.
FORMULAS
Pearson’s Correlation
Regression
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