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linear regression
Introduction
Correlation is a statistical tool used to determine
the degree in which two random variables are
related.
Correlation analysis shows us how to determine the
nature (direction) and strength (magnitude) of
a relationship between two variables.
It also provides a basis for making predictions when
scores on one variable covary with scores on
another variable.
It means if there were a relationship between these
two variables, then as one variable deviates from its
mean, the other variable should deviate from its
mean in the same or the directly opposite way.
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Correlation coefficient
Pearson's correlation coefficient, r / Pearson
product-moment correlation coefficient
a parametric statistics and it is designed for
interval level (continuous) variables. To test its
significance, we assume normality too.
Spearman's correlation coefficient, rs
a non-parametric statistics and requires ordinal
data for both variables.
Kendall's correlation coefficient,
a non-parametric statistics like Spearman's but
probably better for small samples.
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We will only be learning the Pearson productmoment correlation coefficient, which measures
the strength of the linear association between
variables.
Types of correlation relationship
How to read a scatterplot
How to interpret the sign and absolute value of r
Issues with correlation
Coefficient of determination
We will also cover simple linear regression, a model
of the relationship between two variables.
How to predict a score of a variable from another
variable
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Linearity in correlation
Correlation coefficient measures the linear
association between variables.
A perfect linear relationship happens when all the
points fall in the straight line.
A non-linear relationship happens when the points
didnt fall into a straight line.
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Magnitude of correlation
Correlation coefficient lies between +1 to -1.
Correlation coefficient is the quantitative index of
the magnitude (strength) of the correlation; the
degree of covariation present between variables.
A correlation of -1 indicates a perfect negative
correlation.
A correlation of +1 indicates a perfect positive
correlation.
A value of 0.00 indicates that there is no linear
relationship between the two variables (and hence
no basis for making prediction).
Keep in mind that a correlation of 0 does not mean zero relationship
between two variables. It is possible to have zero linear relationship
but a strong curvilinear relationship.
Magnitude of correlation
(cont.)
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Direction of correlation
The sign of a correlation coefficient describes the
direction of the relationship between two
independently observed variables.
A positive correlation is a relationship between
two variables in which both variables move in the
same direction. It indicates that as the values for
one measure increase, the values of the other
measure also increase or as the values for one
measure decrease, the values of the other measure
also decrease.
For example, smoking and lung cancer.
A negative correlation is a relationship between
two variables in which both variables move in the
different direction. It indicates that as the values
of one measure increases, the values of the other
measure decreases
or as the values of9 one measure
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Direction of correlation
(cont.)
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Scatterplots
Correlation is heavily affected by outliers. As you
can see from the figure below, the single outlier in
the last plot greatly reduces the correlation from
1.00 to 0.71.
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Coefficient of determination,
r2
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Coefficient of determination,
r2 (cont.)
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Y=mx + c
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