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Understanding Correlation Coefficient (r)

This document discusses the simple correlation coefficient (r) and the coefficient of determination (R-squared). [1] It defines r as a measure of the strength and direction of the linear relationship between two quantitative variables. [2] It provides the formula to calculate r and shows an example calculation. [3] It then introduces R-squared as a measure of how well the linear regression line fits the data, which is calculated by squaring r.

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Rohit Pant
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0% found this document useful (0 votes)
10 views18 pages

Understanding Correlation Coefficient (r)

This document discusses the simple correlation coefficient (r) and the coefficient of determination (R-squared). [1] It defines r as a measure of the strength and direction of the linear relationship between two quantitative variables. [2] It provides the formula to calculate r and shows an example calculation. [3] It then introduces R-squared as a measure of how well the linear regression line fits the data, which is calculated by squaring r.

Uploaded by

Rohit Pant
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Squared R vs R

Made By-
Harshit Guleria
Abhinav Kumar
Simple Correlation coefficient (r)
• It is also called Pearson's correlation
or product moment correlation
coefficient.
• It measures the nature and strength
between two variables of
the quantitative type.
• The sign of r denotes the nature of
association

• while the value of r denotes the


strength of association.
• If the sign is +ve this means the relation
is direct (an increase in one variable is
associated with an increase in the
other variable and a decrease in one
variable is associated with a
decrease in the other variable).

• While if the sign is -ve this means an


inverse or indirect relationship (which
means an increase in one variable is
associated with a decrease in the other).
• The value of r ranges between ( -1) and ( +1)
• The value of r denotes the strength of the
association as illustrated
by the following diagram.
• If r = Zero this means no association or
correlation between the two variables.

• If 0 < r < 0.25 = weak correlation.

• If 0.25 ≤ r < 0.75 = intermediate correlation.

• If 0.75 ≤ r < 1 = strong correlation.

• If r = 1 = perfect correlation.
How to compute the simple correlation
coefficient (r)

 xy   x y
r n

x 
2
(  x) 2
 
.  y 
2
(  y) 2


 n  n 
  
Example:

A sample of 6 children was selected, data about their


age in years and weight in kilograms was recorded as
shown in the following table . It is required to find the
correlation between age and weight.

Weight Age serial


(Kg) (years) No
12 7 1
8 6 2
12 8 3
10 5 4
11 6 5
13 9 6
These 2 variables are of the quantitative type, one
variable (Age) is called the independent and
denoted as (X) variable and the other (weight)
is called the dependent and denoted as (Y)
variables to find the relation between age and
weight compute the simple correlation coefficient
using the following formula:

 xy   x y
r  n

  x2 
(  x) 2

.  y 2 
(  y) 2


 n  n 
  
Weight Age
Serial
Y2 X2 xy (Kg) (years)
.n
(y) (x)
144 49 84 12 7 1

64 36 48 8 6 2

144 64 96 12 8 3

100 25 50 10 5 4

121 36 66 11 6 5

169 81 117 13 9 6

=y2∑ =x2∑ xy=∑ =y ∑ =x∑ Total


742 291 461 66 41
41  66
461 
r 6
 (41) 2   (66) 2 
291  .742  
 6  6 

r = 0.759
strong direct correlation
Coefficient of Determination (Squared R)

To determine how well the regression line


fits the data, we find a value called R-
Squared (r2)
To find r2, simply square the correlation
The closer r2 is +1, the better the line fits
the data
r2 will always be a positive number
For example, here’s how to find the R Squared
value for the data/graph below:
X Y
3 40
10 35
11 30
15 32
22 19
22 26
23 24
28 22
28 18
35 6
Equation for Line of Best Fit: y = .94x + 43.7
Correlation = -.94
Equation for Line of Best Fit: y = .94x + 43.7

Distance
Mean
Predicted Error between Y
X Y Error distances
Y Value Squared values and
squared
their mean
3 40
10 35
11 30
15 32
22 19
22 26
23 24
28 22
28 18
35 6
Mean: Sum: Sum:
Equation for Line of Best Fit: y = .94x + 43.7

Distance
Mean
Predicted Error between Y
X Y Error distances
Y Value Squared values and
squared
their mean
3 40 40.88 .88 .77 14.8 219.04
10 35 34.30 -.70 .49 9.8 96.04
11 30 33.36 3.36 11.29 4.8 23.04
15 32 29.60 -2.40 5.76 6.8 46.24
22 19 23.02 4.02 16.16 -6.2 38.44
22 26 23.02 -2.98 8.88 .8 .64
23 24 22.08 -1.92 3.69 -1.2 1.44
28 22 17.38 -4.62 21.34 -3.2 10.24
28 18 17.38 -.62 .38 -7.2 51.84
35 6 10.80 4.8 23.04 -19.2 368.65
Mean: 25.2 Sum: 91.81 Sum: 855.60
To calculate “R Squared”…

1-
Sum of squared distances between the
actual and predicted Y values

Sum of squared distances between the


actual Y values and their mean

1- 91.81
855.60

1- 0.11 =.89
THANK YOU

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