Correlation
Hello everyone welcome to the Pexario blogger site in this session. We
will discuss a very widely used term in statistics that is correlation and
we will see what is the significance of correlation and where it is used? So
let's discuss the agenda for today's session we'll start this tutorial by
understanding what is correlation then we want to discuss the two types of
correlation and correlation coefficient after that we will see the
limitations of correlation and some real-life applications of correlation.
So let's get started
What is correlation?
Correlation refers to a statistical relationship between two entities it
measures the extent to which the two variables are linearly related for
example the price and demand of a product are in correlation they have
linearly related the value of correlation is always lies between minus one to
plus one there are mainly two types of correlation
Positive Correlation :
The first one is a positive correlation. A positive correlation means that
the linear relationship is positive and the two variables increase or
decrease in the same direction the number of trees cut down and the
probability of erosion is in correlation when one increases other also
increases and vice versa.
Negative correlation :
A negative correlation is just the opposite the relationship line has a
negative slope and the variables change in opposing directions for example
if you decrease the speed of the car the time taken to reach the destination
increases this is the negative correlation.
Correlation coefficient :
The correlation coefficient which is denoted by r gives us a measure of the
strength of the linear relationship between the two variables the value is
denoted by the letter r and it ranges from minus 1 to plus 1. if it is less
than 0 it implies that there is a negative correlation the minus 1 indicates
there is a strong negative correlation between the variables. If r is
greater than 0 it implies there is a positive correlation plus 1 is the
strongest point of a positive correlation when r is equal to 0 we can say
that there is no correlation between the variables.
Limitations of Correlation :
There are also some limitations to correlation
The first one is correlation does not give you every insight on the data
mean and standard deviation are still the important parameters to get insight into a data
The second one is the data will not produce a straight line every time and
it will be difficult to predict the value of r just with the straight line
or the slope of the graph.
Real-life Application :
Now let's see some real-life applications of correlation if you take any
e-commerce company whose website is accessed by millions of users all over
the world the company can look at all the data and they can measure how much
time was spent by the customer and the respective money spent by the
customer we can also predict the unique users that visited the website and
how it affected the sales in a day. The third application can be the patient
blood pressure and the medication used the level of the patient blood pressure
and the effect of medication on it can be correlated.
So with this, we come to the end of this tutorial thank you all for reading
this session. we hope you enjoyed it if you have any questions feel free to
put them in the comments section of this blog thank you again and happy
learning.