If two or more quantities vary in

sympathy, so that movement in the one

tends to be accompanied by
corresponding movement in other ,
then they are said to be correlation.
 If the two variable move in the same direction i.e., with
an increase in one variable , the other variable also
increase or fall in one variable, the other variable also
falls, the correlation is said to be positive.
EXAMPLES;-
The above table shows that as price increase the supply also
increase and vice-versa.

PRICE(RS) 20 30 40 50 60

SUPPLY(UNITS) 100 120 140 160 180

 200

180

S 160

U
140

120

P 100
SUPPLY(UNITS)

P 80

L
60

40

Y 20

0
0 10 20 30 40 50 60 70

PRICE
 From the following given data. Draw the postive diagram.

Temperature number of ice-creams sold 120

21 70 T
e 100
26 86
m 80
15 50
p
24 80 e 60

18 58 r 40
29 96 a
20 66 t 20

27 92 u
0

23 74
r 0 10 20 30 40

e
17 54
30 100
19 62 No.of ice creams sold.
 The correlation is negative, when variables move in opposite
direction. In this case, with the increase in one variable, the
other variable falls or with the fall in one variable the other
variable is rise.
EXAMPLE:-
The above example shows that with the fall in price,
the demand rise and vice-versa. negative correlation.

PRICE(RS) 50 40 30 20 10
DEMAND(UNITS) 100 120 140 160 180
 200

180

160

D 140

E 120

M 100
DEMAND(UNITS)
A 80

N 60

D 40

20

0
0 10 20 30 40 50 60

PRICE
 EXAMPLES;-
 By using two variable. Year and number of farm
workers. Draw Negative diagram in this given
information.

10000

Number of farm 9000

No 8000
workers in
0f 7000
Year thousand fa 6000

1940 8995 r 5000

m 4000
1950 6858 er 3000

2000
1960 4132 1000

1970 2881 0
1920 1940 1960 1980 2000

1980 2818
Year
1990 2864
If the ratio of change between two
variable is constant, the correlation is
said to be linear. If such variable are
plotted on a graph paper, the points
with lie on the straight line.
 X Y
10 5
20 10
30 15
40 20
50 25

The ratio of change is the same in both the variable. For every change in
variable x by 10 units. There is change in variable y by 5 units. Then the
ratio of change the two variable is 2:1.

30
25
20
Y 15
Y
10
5
0
0 20 40 60
X
If the ratio of change between two variable is
not uniform, the correlation is said to be non-
linear. if the value of the variable are plotted
graphically, these point would not give a
straight line. Non-linear correlation is also
known as curvi –linear.
 X Y
10 5
20 8
30 12
40 17
50 24

IN this example the value of Y does not change at a constant ratio.

18
16
14
12

Y 10
8 Y
6
4
2
0
0 10 20 30 40 50

X
 Draw a scatter diagram from the following data relating to income
and expenditure on food of 5 rural house hold.

Household 1 2 3 4 5
Income(x)( in rs) 5500 6000 8000 7000 6500
Exp. Food (y) 4000 4500 5500 5500 4000

E EXP. Food (y) (in RS)

X 6000
P 7000,5500
5000
E 6000,4500 8000,5500
N 4000
5500,4000
D 6500,4000
3000
I
T 2000 EXP. Food (y) (in RS)
U
1000
R
E 0
0 2000 4000 6000 8000 10000

INCOME
When there are only two variables and relationship is studied
between those variable it is simple correlation. Example :-
HEIGHT AND WEIGHT, PRICE AND DEMAND etc.

IN Partial correlation, we recognize that more than two

variable are involve. Example correlation between X and
Y1,Y2,Y3 and so on.
The correlation shows how strong the linear
relationship between two variable are. If the
correlation is positive, that means both the
variable are moving in same direction.
Negative correlation implies, when one
variable increase the other variable decrease.