There are many situations

where two quantitative

variables tend to be related or
relationship exists between
them.
Income and
educational
attainment may be
related to each
other. If one has a
high educational
attainment, he is
likely to have a high
income. Also high
income might be
associated with high
expenditures.
Most of us will accept that a relationship
exist between those variables. But how
can we determine the degree or strength
of relationship that exist between the
two variables?

Deals with the most common type

of relationship between two
variables, how to compute the
coefficient of correlation between
these variables; and to interpret
the value obtained.
 A researcher has mapped the average SAT scores of students at
US colleges against the most popular music at that college.
Apparently, smart people listen to Radiohead over Beyonce
(fortunately, correlation doesn't equal causation).

https://www.facebook.com/ScienceAlert/photos/a.10150142234567518.335336.7557552517/10152902748727518/?type=1
a direct or positive relationship
between two variables implies
that an increase in value of one
of the variables correspond to an
increase in value of the other
variable.
an inverse or negative
relationship between two
variables means that an
increase in the value of one
variable corresponds to a
decrease in the value of the
other variable.
a zero relationship exist
between two variables if an
increase in one is not
accompanied by either an
increase or a decrease in
another.
We can describe the relationship
between two variables by describing
the magnitude of correlation.

The degree or strength may be

perfect, high, moderate or low.
The degree or strength of
correlation between two
variables is hard to determine
by just using the scatter
diagram. Thus we have to use a
descriptive measure that will
tell us the magnitude or degree
of relationship between two
variables.
This descriptive measure is a single
number called the correlation
coefficient, denoted by r.
The value of r ranges from -1
to 1. Hence, there is neither a
value of r than can exceed +1
nor lower than -1. The
interpretation of the value of r
can be determined using
correlation scale.
If r is +1, then there is a perfect
positive correlation.

If r is -1, then there is a perfect

negative correlation.

If r is 0, then there is a no
correlation.
 Value of r Interpretation

Between 0.80 to 0.99 High Correlation

Between 0.60 to 0.79 Moderate High Correlation

Between 0.40 to 0.59 Moderate Correlation

Between 0.20 to 0.39 Low Correlation

Between 0.01 to 0.19 Negligible Correlation

Suppose r is +.78, then
there us moderate positive
correlation. Thus the sign r
indicates the direction of
correlation while the absolute
value of r indicates the
extent or magnitude of
correlation
Indicate the direction of correlation
between the following pairs of variables.

Income and Expenditures

Demand and Supply

Indicate the direction of correlation
between the following pairs of variables.

Physics and Mathematics

Shoe Size and IQ level

Indicate the direction of correlation
between the following pairs of variables.

Scholastic Success and

Annual Income

Age and income

To find out if there is a
relationship between two
internal ratio variables.
 n  XY − ( X )( Y )
r =
n X 2 2

− ( X ) n  Y − ( Y )
2 2

 A businessman would like to determine if
there is a relationship between the size of
store and the profit earned from the store.
The following data gathered from other
store owners pertains to the size of the
store in square meters and the profit they
earned in thousand pesos. Calculate “r” and
interpret the results.
Store Size (X) 24 21 18 15 15 15 12 12 9 9
Profit (Y) 18 16 10 16 12 10 10 8 6 4
 X Y
X2 Y2 XY
scores scores
24 18 576 324 432
21 16 441 256 336
18 10 324 100 180
15 16 225 256 240
15 12 225 144 180
15 10 225 100 150
12 10 144 100 120
12 8 144 64 96
9 6 81 36 54
9 4 81 16 36
X = Y = X
2
Y
2
 XY =
150 110 2466 1396 1824
 n  XY − ( X )( Y )
r =
n X 2 2

− ( X ) n  Y − ( Y )
2 2

10(1824) − (150)(110)
r =
10(2466) − (150) 10(1396) − (110) 
2 2

r = 0.87
-1 ≤ r ≤ 1.

If r is positive then the variables are

directly related.

If r is negative then the variables are

inversely related.
Interpretation:
The absolute value of r that is…

0.8 and above is considered high

coefficient.

0.5 is considered moderate.

0.3 and below is considered

low coefficient.
High Positive
Relationship
Explanations why two variables X and Y
can be related:
❑ One may be the cause of the other – X
may cause Y
❑ Y may cause X
❑ The two, X and Y, may be the result of
a common cause or both are related to
a third variable Z
 A personnel manager would like to know if
there is a relationship between knowledge
factors and practical factors of a training
course. Following are the scores received by
six trainees on the knowledge factors, X
and the practical factors, Y of a training
course.
Trainee 1 2 3 4 5 6
Knowledge Factors (X) 2 4 4 5 7 8
Training Factors (Y) 4 10 8 8 14 16
 X Y
X2 Y2 XY
scores scores
2 4 4 16 8
4 10 16 100 40
4 8 16 64 32
5 8 25 64 40
7 14 49 196 98
8 16 64 256 128
X = Y = X
2
Y
2
 XY =
30 60 174 696 346
 n  XY − ( X )( Y )
r =
n X 2 2

− ( X ) n  Y − ( Y )
2 2

6(346) − (30)(60)
r =
6(174) − (30) 6(696) − (60) 
2 2

r = 0.96
There is a high positive
correlation between
the two variables.