Wednesday, June 3, 2009

What is Correlation analysis?

Assume one situtation, when we add the sugar into tea , this increases the sweetness of tea. More sugar , means more sweetness of tea. Here tea and sugar are two variables whcih goes into one direction. There is a correlation between these two variables. This is the correlation and Correlation is a measure of association between two variables.
The value of a correlation coefficient ranges from -1 to +1. A minus one indicates a perfect negative correlation, while a plus one indicates a perfect positive correlation. A correlation of zero means there is no relationship between the two variables. When there is a negative correlation between two variables, as the value of one variable increases, the value of the other variable decreases, and vise versa. In other words, for a negative correlation, the variables work opposite each other. When there is a positive correlation between two variables, as the value of one variable increases, the value of the other variable also increases. The variables move together. The two most popular correlation coefficients are: Spearman's correlation coefficient rho and Pearson's product-moment correlation coefficient.
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