CORRELATION -Rank Correlation

Correlation
Definition: In a distribution if the change in one variable effects a change in the other variable, the variable are said to be correlated(or there is a correlation between the variables) Let X and Y measure some characteristics of a particular system .To study the overall measure of the system it is necessary to measure the interdependence of X and Y.

Correlation
If the quantities(X,Y) vary in such a way that change in one variable corresponds to change in the other variable then the variables X and Y are correlated. Types of Correlation: The important ways of classifying the correlation are: 1. Positive and Negative 2. Simple , Partial and Multiple 3. Linear and non-Linear.

Correlation
Methods of Studying Correlation: The following are the important methods of ascertaining between two variables.  Scatter diagram method  Karl Pearsons Co-efficient  Spearmans Rank Correlation Co-Efficient Scatter Diagram Method: The simplest device for studying correlation between two variables is a special type of dot chart.

Correlation
Karl Pearsons Co-Efficient of Correlation: r = ( xy) / (N x y ) where x x = (x-) y y= (y- ) x =Standard Deviation of Series X. y =Standard Deviation of Series Y. r= The correlation Coefficient N=Number of Pairs of Observation.

Demerits
By applying Scatter diagram method we can get an idea about the direction of correlation and also whether it is high or low. But we cannot establish the exact degree of correlation between the variables as it is possible by applying mathematical methods. The Karl Pearsons method is based on the assumption that the population being studied is normally distributed. When it is known that the population is not normal or when he shape the distribution is not known, there is need for a measure of correlation that involves no assumption about the parameter of the population.

So Why Rank Correlation????

It is possible to avoid making any assumptions about the populations being studied by ranking the observations according to size and basing the calculations on the ranks rather than upon the original observations. It does not matter which way the items are ranked, item number one may be the largest or it may be the smallest. Using ranks rather than actual observations gives the coefficient of rank correlations. This method of finding out co variability or the lack of it between two variables was developed by the British Psychologist Charles Edward Spearman in 1904.

Ranking
A ranking is a relationship between a set of items such that, for any two items, the first is either 'ranked higher than', 'ranked lower than' or 'ranked equal to' the second. In mathematics, this is known as a weak order or total preorder of objects. It is not necessarily a total order of objects because two different objects can have the same ranking. The rankings themselves are totally ordered. For example, materials are totally preordered by hardness, while degrees of hardness are totally ordered.

Rank Correlation
Rank correlation is the study of relationships correlation between different rankings on the same set of items. It deals with measuring correspondence between two rankings, and assessing the significance of this correspondence. Spearmans correlation coefficient is defined as: r = 1-((6D2)/(N(N-1)2)) Where r , denotes rank coefficient of correlation and D refers to the difference of rank relation between paired I tems in two series.

Features
The rank method has principal uses: The sum of the differences between two variables is zero. Spearmans rank correlation coefficient is the Pearsonian correlation coefficient between the ranks. The rank correlation can be interpreted in the same way as Karl Pearsons correlation coefficient.

Features
Karl Pearson correlation coefficient assumes that the sample observations are drawn from a normal population. Rank correlation coefficient is a distributionfree measure since no strict assumption is made about the population from which it is drawn. The values obtained for two formulae are different due to the fact that when ranking is used some information is hidden. Spearmans formula is the only formulae available to find the correlation between qualitative characters.

Types of Rank Methods

In the rank correlation we may have two types of problems: Where ranks are given Where ranks are not given Where repeated ranks occur Note: If r = 1 then there is a perfect Positive correlation If r = 0 then the variables are uncorrelated If r=-1 then there is a perfect Negative Correlation

Where ranks are given :

Where actual ranks are given to us the steps required for computing rank correlation are: Take the difference of the two ranks, i.e., (R1-R2) and denotes these differences by D. Square these difference and obtain the total Apply the formula

Where ranks are not given

When we are given the actual data and not the ranks, it will be necessary to assign the ranks. Ranks can be assigned by taking either highest values as 1 or the lowest value as 1. But whether we start with the lowest value or the highest value we must follow the same method in case of both the variables.

Steps To Find RC
Step 1:
Draw the table like

 Step 2:
Fill the data field with the given data

 Step 3:
Give the Rank for the data

 Step 4
Find the difference d & d2

 Step 5:
Apply the formula:

r=

Where d= difference, n=no.of data

 THANK YOU