Correlation by ramesh kumar

Thomas Robert Malthus

WELCOME

BY: - RAMESH KUMAR,

PGT – ECONOMICS,

K V NO.1, BATHINDA CANTT.

CONCEPTUAL QUESTIONS: -

1. What is relationship between height and weight?

2. What is relation between age of husband and wife?

3. What is the relationship between price and demand?

What do you Mean by correlation?

Meaning of Correlation

Correlation is a statistical tools which shows the relationship between the two variables in which change in the value of one variable due to change in the value of other variable

KINDS OF CORRELATION

• Positive and Negative correlation

• Linear and Non Linear Correlation.

• Simple, Multiple and Partial Correlation.

Positive and Negative correlation

When both the variable change in the same direction, i.e. both the variables increase or both the variables decrease, it is called Positive Correlation

POSITIVE CORRELATION

Both Variables increasing

• X Y

• 10 100

• 20 150

• 30 160

• 40 190

• 50 200

• 60 255

Both Variables Decreasing

• X Y

• 70 147

• 60 140

• 40 135

• 30 130

• 15 120

• 10 90

What is negative Correlation?

Negative Correlation

When both variable change in the opposite direction, it is called Negative correlation.

NEGATIVE CORRELATION

One Variable increasing and other Decreasing

• X Y

• 25 125

• 30 110

• 35 90

• 40 80

• 45 75

• 50 60

One variable Decreasing , the other increasing

• X Y

• 75 110

• 60 180

• 40 190

• 30 300

• 20 240

• 10 250

ACTIVITY FOR THE STUDENTS

Please write down: -

(A) 4 example of Positive Correlation and

(B) 4 examples of negative Correlations

Examples of Positive and Negative Correlation

POSITIVE CORRELATION:-

1. Age of Husband & Age of wife

2. Price of commodity and amount of supply.

3. Increase in heat affects temperature.

4. Increase in height and weight.

NEGATIVE CORRELATION: -

1. Demand of commodity may go down a aresult of rise in prices.

2. Sale of woollengarments and day temperature.

3. Yield of crops and price.

Linear correlation and Non Linear Correlation

* If the Ratio of change between two variables is uniform than Linear correlation exists.

* linear and Non – Linear correlation is based upon the consistency of the ratio of changes between the variables.

* Their relationship described by straight line

If the variables under study are graphed, the point will form a straight line,

LINEAR CORRELATION

• In case of non linear relationship , the amount of change in one variable does not bear a constant ratio to the amount of change in the other variable, Such as relationship will form a curve on graph.

Non Linear Correlation

If the ratio of change between the variable is not the same than Non linear correlation exists. Non –Linear Relationship will form curve on graph.

Simple Correlation

Simple Correlation : - It is based upon the number of variable under study.

• When only two variables are studied, the correlation between them is called simple Correlation

Multiple and Partial Correlation

When three or more variables are studied the relationship can be either multiple or partial.

DEGREE OF CORRELATION

There is three types of correlations: -

1. Perfect Correlation.

2. Zero Correlation.

3. Limited degree Correlation.

PERFECT DEGREE OF CORRELATION: -

• Perfect degree correlation is that where changes in two variables are exactly proportional. If equal proportion changes are in the same direction, there is perfect positive correlation between the two values described as + 1,

• If equal proportional changes are in the reverse direction, there is perfect negative correlation, described as -1.

ZERO DEGREE CORRELATION

• The value of Coefficient of correlation may be zero. It means that there is zero correlation.

• It does not mean the absence of any type of relation between the two variables. Two value are uncorrelated . However, other type of relation may be there. There is no Linear relationship between them.

LIMITED DEGREE CORRELATION

• In social science , the variables may be correlated, but an increase in one variable need not always be accompanied by a corresponding or equal increase (or decrease) in the variableS.

• Correlation said to be limited positive when there are unequal's changes in the two variables in the same direction and correlation degree of combination can be high ( between + 0.75 to 0.99 and - 0.75 to -0.99)

• Moderate ( + 0.25 to + 0.74 and -0.25 to -0.74)• Low degree correlation 0 to + 0.24 and 0 to -0.24)

-

DEGREE OF CORRELATION

PERFECT CORRELATION

NO CORRELATION

-1

POSITIVE OPERFECT

+1

DEGREE OF CORRELATION

LIMITED DEGREE CORRELATION

NEGATIVEPOSITIVE

LIMITED DEGREES OF CORRELATION

HIGH

+ 0.75 TO 0.99

-.075 TO -0.99

MODERATE

+0.25 TO + 0.74

-0.25 TO – 0.74

LOW

+0 TO +0.24

0 TO -0.24

RECAPTULATION : -

• 1. What is correlation?

2. What is Positive Correlation?

3. What do you mean negative correlation?

4. What is Simple correlation?

5. What is meant by Multiple Correlation?

HOME ASSIGNMENT

• What is meant by Correlation?

• What are different types of correlation? Show with the help of example of daily life.

• PROJECT: - Calculate Correlation between History and Economics, Economics and Maths. of the students of your group on the basis of First Term Unit Test Marks.

• Correlation with other subjects.

Thanks

RAMESH KUMAR,

PGT ECONOMICS,

K V NO.1, BATHINAD CANTT.