REVIEW

The correlation coefficient (r) is a number which describes the

strength and direction of relationship between two variables.
VALUE INTERPRETATION
VALUE OF r INTERPRETATION
OF r
r=1 Perfect Positive ±0.81 TO ±0.99 Very High Correlation
correlation ±0.61 TO ±0.80 High Correlation
r=0 No correlation or ±0.41 TO ±0.60 Moderately High
zero correlation Correlation
r=-1 Perfect Negative ±0.21 TO ±0.40 Low Correlation
correlation ±0.01 TO ±0.20 Negligible Correlation
Given the value of r, describe the
relationship in terms of strength and
direction.
1. r = 0.86
2. r = 0.35
3. r = -0.65
4. r = -0.56
5. r = 0.72
PEARSON product-moment correlation coefficient
Since the scatter plot is not accurate enough to describe
the direction and strength of correlation between two
variables, a more systematic approach in describing the
correlation is by determining its coefficient. To compute for the
coefficient, you may use the Pearson Product Moment
Correlation. The Pearson Product Moment Correlation
Coefficient r is used to measure the degree of the correlation
between two variables. Both variables are required to be
normally distributed.
PEARSON product-moment correlation coefficient

Where X=value of variable X

Y=value of variable Y
𝑋=mean of variable X
𝑌=mean of variable Y
EXAMPLE
A store manager wishes to find out whether there is a
relationship between the age of the employees and
the number of sick days they incur each year. The
data for the sample are shown. Calculate the
correlation coefficient (r) and describe the relationship
`
EMPLOYEE A B C D E F
AGE (X) 18 26 39 48 53 58 𝜮𝑿 = 𝟐𝟒𝟐
DAYS (Y) 16 12 9 5 6 2 𝜮𝒀 = 𝟓𝟎
𝜮𝑿 𝟐𝟒𝟐 𝜮𝒀 𝟓𝟎
𝑿= = = 𝟒𝟎. 𝟑𝟑 𝒀= = = 𝟖. 𝟑𝟑
𝒏 𝟔 𝒏 𝟔
EMPLOYEE X Y (𝑿 − 𝑿)𝟐 (𝒀 − 𝒀)𝟐 (𝑿 − 𝑿)(𝒀 − 𝒀)
A 18 16 498.63 58.83 -171.27
B 26 12 205.35 13.47 -52.59
C 39 9 1.77 0.45 -0.09
D 48 5 58.83 11.09 -25.54
E 53 6 160.53 5.43 -29.52
F 58 2 312.23 40.07 -111.85
𝜮𝑿 𝜮𝒀 𝜮(𝑿 − 𝑿)𝟐 𝜮(𝒀 − 𝒀)𝟐 𝜮(𝑿 − 𝑿)(𝒀 − 𝒀)
= 𝟐𝟒𝟐 = 𝟓𝟎 = 𝟏𝟐𝟑𝟔. 𝟖𝟒 = 𝟏𝟐𝟗. 𝟑𝟒 =−390.56

Σ(𝑋 − 𝑋)(𝑌 − 𝑌) −390.56

𝑟=
Σ 𝑋−𝑋 2 Σ(𝑌 − 𝑌)
𝑟=
(1236.84)(129.34) 𝑟 = −0.98
Using the correlation scale, we interpret
the obtained value of r=-0.98 as very
high negative correlation.
Thereis a very high negative correlation
between the age of employees and the
number of their sick days.
ANOTHER FORMULA FOR COMPUTING THE PEARSON
PRODUCT-MOMENT CORRELATION COEFFICIENT
𝑛Σ𝑋𝑌 − Σ𝑋Σ𝑌
𝑟=
𝑛Σ𝑋 2 − Σ𝑋 2 𝑛Σ𝑌 2 − (Σ𝑌)2

Where r = Pearson Product Moment Correlation Coefficient

X=value of variable X
Y=value of variable Y
𝑋=mean of variable X
𝑌=mean of variable Y
n = number of paired samples
 EMPLOYEE X Y XY 𝑿𝟐 𝒀𝟐
A 18 16 288 324 256
B 26 12 312 676 144
C 39 9 351 1521 81
D 48 5 240 2304 25
E 53 6 318 2809 36
F 58 2 116 3364 4
𝜮𝑿 = 𝟐𝟒𝟐 𝜮𝒀 = 𝟓𝟎 𝜮𝑿𝒀 = 𝟏𝟔𝟐𝟓 𝚺𝑿𝟐 𝚺𝒀𝟐
= 𝟏𝟎𝟗𝟗𝟖 = 𝟓𝟒𝟔

𝑛Σ𝑋𝑌 − Σ𝑋Σ𝑌 6(1625) − (242)(50)

𝑟=
𝑛Σ𝑋 2 − Σ𝑋 2 𝑛Σ𝑌 2 − (Σ𝑌)2 𝑟=
6(10998) − 242 2 6(546) − (50)2

𝑟 = −0.98
TESTING THE SIGNIFICANCE OF THE PEARSON
PRODUCT-MOMENT CORRELATION COEFFICIENT
To test the significance of the correlation coefficient,
use following formula. 𝑟
𝑡=
1 − 𝑟2
𝑛−2

Where r = correlation coefficient

n = sample size
df = n - 2
 A soft drink distributor is interested to find out if the
number of cases of soft drinks ordered is related to the
travel time they are delivered. The following data have
been obtained from past experiences.
Number of Cases of Soft Drinks (X) Travel time in minutes (Y)

24 21
6 3
16 6
64 15
10 21
25 61
35 20
 X Y XY 𝑿𝟐 𝒀𝟐

24 21 504 576 441

6 3 18 36 9
16 6 96 256 36
64 15 960 4096 225
10 21 210 100 441
25 61 1525 625 3721
35 20 700 1225 400
𝜮𝑿 = 𝟏𝟖𝟎 𝜮𝒀 = 𝟏𝟒𝟕 𝜮𝑿𝒀 = 𝟒𝟎𝟏𝟑 𝚺𝑿𝟐 = 𝟔𝟗𝟏𝟒 𝚺𝒀𝟐 = 𝟓𝟐𝟕𝟑

𝑛Σ𝑋𝑌 − Σ𝑋Σ𝑌 7(4013) − (180)(147)

𝑟= 𝑟=
𝑛Σ𝑋 2 − Σ𝑋 2 𝑛Σ𝑌 2 − (Σ𝑌)2 7(6914) − 180 2 7(5273) − (147)2
𝑟 = 0.104 There is a negligible positive correlation
between the number of cases of soft drinks
orders to the travel time they are delivered.
 To test the significance of r, follow the steps in testing the hypothesis.
Step 1
𝐻𝑂 : There is no significant relationship between the number of cases of soft drinks
ordered and the travel time they are delivered.
𝐻𝑎 : There is a significant relationship between the number of cases of soft drinks
ordered and the travel time they are delivered.

Step 2
Get the critical value of t at 0.05 level of significance.
Since n=7,
df = n – 2
df = 5
using the table for the t distribution, the critical value of t is 2.571.
Step 3
to compute the test value, use the formula for testing the significance of r.

𝑟 0.104
𝑡= 𝑡=
1 − 𝑟2 1 − (0.104)2 𝑡 = 0.234
𝑛−2 7−2
Step 4
Make a decision whether to accept or reject the null hypothesis.
Since the absolute value of the computed t value (0.234) is less that
the absolute value of the tabular or critical value (2.571), accept the null
hypothesis.

Step 5
There is no significant relationship between the number of
cases of soft drinks ordered and the travel time they are
delivered.
The average normal daily temperature (in degrees Fahrenheit)
and the corresponding average monthly precipitation (in
inches)for seven months are shown here. At 𝛼 = 0.01,
determine if there is a significant relationship between
temperature and precipitation.
Average Daily Temperature X Average monthly precipitation Y

86 3.4
81 1.8
83 3.5
89 3.6
80 3.7
74 1.5
64 1.2