STAT 8010 Lecture Notes - Lecture 16: Correlation And Dependence
Document Summary
Correlation analysis is a method used to determine the strength of the linear relationship between two variables (x and y). The parameter which measures the strength of the linear relationship is called rho ( ). If =0, then the variables x and y are uncorrelated. If >0, then we say there is a positive correlation between x and y. A positive correlation indicates that as the x values increase, so do the y values. If <0, then we say there is a negative correlation between x and y. A negative correlation indicates that as the x values increase, the y values will decrease. The linear correlation parameter are between -1 and 1, inclusive. If =1 or -1, then we say there is a perfect linear correlation between variables x and y. One estimator of the linear correlation ( ) is called the pearson product moment coefficient of correlation (r). Formula for the pearson product moment coefficient of correlation r.
