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Session 18 1
Session 18 1
Lung Capacity
60
40
20
0
0 10 20 30
• We can see that as smoking goes up, lung capacity tends
to go down.
• The two variables change the values in opposite
directions.
Height and Weight
• Consider the following data of heights and weights of 5
women swimmers:
Height (inch): 62 64 65 66 68
Weight (pounds): 102 108 115 128 132
• We can observe that weight is also increasing with
height.
150
100
50
0
60 65 70
• Sometimes two variables are related to each other.
• The values of both of the variables are paired.
• Change in the value is reflected in the change of the value of
other.
• Usually these two variables are two attributes of each member
of the population
• For Example:
Height Weight
Advertising Expenditure Sales Volume
Unemployment Crime Rate
Rainfall Food Production
Expenditure Savings
Correlation
• Karl Pearson’s Correlation coefficient is given by
Cov( X , Y )
rXY = Corr ( X , Y ) =
Var( X ) Var(Y )
n i =1 n i =1
Properties of Correlation Coefficient
• It is unit free.
X
Positively Correlated Negatively Correlated
n
, n
SSXY = xy −
2
n
x y x2 y2 x.y
1.25 125 1.5625 15625 156.25
1.75 105 3.0625 11025 183.75
2.25 65 5.0625 4225 146.25
SSX = 1.56
2.00 85 4.0000 7225 170.00
2.50 75 6.2500 5625 187.50
SSY = 4450
2.25 80 5.0625 6400 180.00
2.70 50 7.2500 2500 135.00
2.50 55 6.2500 3025 137.50
SSXY= -79.75
17.20 640 38.54 55650 1296.25
Cigarettes Lung
(X) 2 2 Capacity
X XY Y
(Y)
0 0 0 2025 45
5 25 210 1764 42
10 100 330 1089 33
15 225 465 961 31
20 400 580 841 29
50 750 1585 6680 180
(5)(1585) − (50)(180)
rxy =
(5)(750) − 50 (5)(6680) − 180
2 2
7925 − 9000
=
(3750 − 2500)(33400 − 32400)
−1075
= = −.9615
(1250 ) (1000)
Exercise
Ans: r=.997
Following data gives indices of industrial production and number of
registered unemployed people (in lakh). Calculate correlation
coefficient
Year production unemployed
1991 100 15
1992 102 12
1993 104 13
1994 107 11
1995 105 12
1996 112 12
1997 103 19
1998 99 26
Ans: -.619