Page 4 - Home assignment-correlation analysis.

In other words, when all the points on the scatter diagram tend

to lie near a smooth curve, the correlation is said to be nonlinear
(curvilinear). This is shown in the figure on the right below.

Y Y

X X
O Non-linear positive correlation O Non-linear negative correlation

4. Perfect and Imperfect correlation: -

When both the variables change at a constant rate irrespective of
the change in direction then it is called perfect correlation.

When the variables change at different ratio then it is

called imperfect correlation.

If = +1, then coefficient of correlation is said to be perfect +ve.

If = −1, then coefficient of correlation is said to be perfect -ve.

−1 < < +1, then coefficient of correlation is imperfect.

When = 0, then no relationship exists between the variables

There are six methods of measuring coefficient of correlation

1. Scattered diagram method.
2. Graphic method.
3. Karl-Pearson’s coefficient of correlation.

4. Spearman’s rank coefficient of correlation.
5. Con-current deviation method.
6. Method of least squares.

Scattered-Diagram method: -