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Original Title: Linear Correlation

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CORRELATION

LINEAR CORRELATION

COEFFICIENT

The linear correlation coefficient r,

measures the degree to which the

points in the scatter diagram tend to

cluster about a straight line. In other

words, r measures the degree of linear

relationship between the x and y

values.

DEFINITON

The linear correlation coefficient r for a

collection of n pairs of data values is as shown,

where sx and sy are the standard deviations of

the values of the x values and y values,

respectively

An alternative simplified formula gives the

same result, where n is the number of pairs

of data.

PROPERTIES OF r

The value of r is always between -1 and

1: -1 r 1

r=1, provided that all of the points in the

scatter diagram lie exactly on a line

with a positive slope. Also, r = -1,

provided that all of the points lie

exactly on a line with a negative slope

Suppose r 0. Then the points in the scatter

diagram are grouped around a nonhorizontal

line (regression line). If r is positive, the line is

sloping upward to the right. If r is negative, the

line is sloping downward to the right. The closer

r is t 1 or -1, the closer the points tend to cluster

about the line. Therefore, a value of r close to

1 or -1 indicates a strong degree of linear

relationship.

If the value of r=0, there is no linear relationship

between the x and y values for the data.

When r=0, it can be shown that the line of best

fit is a horizontal line through the points.

TEST OF HYPOTHESIS

PROBLEMS

1. Find the linear correlation coefficient for the

salary data in Table 11.2. Interpret the result.

2. Find the linear correlation coefficient for the

production cost data in Table 11.3.

3. The heights and weights of n = 10 offensive

backfield football players are randomly

selected from a countrys football all-stars.

Calculate the correlation coefficient for the

heights (in inches) and weights (in pounds)

given in Table 11.4.

4. Refer to the height and weight data in Problem

3. The correlation of height and weight was

calculated to be r = 0.8261. Is this correlation

significantly different from 0? Calculate at 1%

level of significance, t at 0.01