Degree of correlation??

CBSE Class 11-commerce Answered

Degree of correlation??

Asked by syedbareeraasad | 24 Jan, 2019, 09:05: PM

Expert Answer

The degree of intensity of relationship between two variables is measured with the coefficient of correlation. They are as follows:

1. Perfect correlation: If two variables change in the same proportion (increase or decrease), then the correlation between them is perfect correlation. Here, perfect correlation can be a positive or negative correlation.

Coefficient of correlation (r) = 1: If there is perfect positive relationship between two variables, then the value of correlation will be +1.

Coefficient of correlation (r) = −1: If there is perfect negative relationship between two variables, then the value of correlation will be −1.

2. Zero correlation: If two variables have no relationship between them, then the correlation is zero. It implies that a change in the value of one variable has no effect on the change in the value of the other variable.

Coefficient of correlation (r) = 0: If there is no relationship between the two variables, then the value of correlation will be zero. However, it does not imply that these two variables are independent. It only indicates non-existence of linear relation between the two variables.

3. Limited degree of correlation:A limited degree of correlation exists between perfect correlation and zero correlation, i.e. the value of the coefficient of correlation lies between +1 and −1. This limited degree of correlation may be high, moderate or low.

High degree of correlation: Correlation of two series of data is closer to one.
Medium degree of correlation: Correlation of two series of data is neither large nor small.
Low degree of correlation: Correlation of two series of data is small.

Answered by Christina | 29 Jan, 2019, 09:56: AM