Arellano University

School of Business Administration

STAT 01C

Lesson 2. Linear Correlation ( Pearson r )

Day & Time : TTh, 4:00 – 5:30
Date : Nov. 25, 2021

LINEAR CORRELATION

A. PEARSON r – MOMENT PRODUCT CORRELATION

The r is the most frequently used technique among the correlation.

r= ∑x’y’
√ ∑(x’)2 ∑(y’)2

Steps:

1. Get the mean of test X and test Y.

2. Get the deviation of the mean x’ and y’.
3. Multiply x’ and y’ to get x’y’ and get the summation.
4. Square x’ to get ( x’ )2 and y’ to get ( y’ )2 and get the summation.

r= N( ∑XY ) - ∑X ∑Y
√ [ N ( ∑X2 ) – (∑X)2 ] [ N ( ∑Y2 ) – ( ∑Y )2

Steps:

1. Get the summation of Test X and Test Y.

2. Multiply Test X and Test Y and get the summation.
3. Square Test X to get X2 and Test Y to get Y2.
4. Get the summation of X2 and Y2.
Range of values: Interpretation

+/- 1.00 ---------------------- Perfect +/- correlation

+/- 0.91 – 0.99 ------------- Very High +/- correlation

+/- 0.71 – 0.90 _______ High +/- correlation

+/- 0.51 – 0.70 ------------ Moderate +/- correlation

+/- 0. 31 – 0.50 ----------- Low +/- correlation

+/- 0.01 – 0.30 ------------ Negligible +/- correlation

1.0 -------------------------- No correlation

Data 1. Compute the value r ( 1 & 2 ) and interpret.

Respondents Math Stat x’ y’ x’y’ (x’)2 (y’)2 XY X2 Y2

(x) (y)
Alona 8 6 -4 -7 28 16 49 48 64 36
Ben 12 15 0 2 0 0 4 180 144 225
Carmina 9 17 -3 4 -12 9 16 153 81 289
Dennis 18 10 6 -3 -18 36 9 180 324 100
Elena 14 20 2 7 14 4 49 280 196 400
Felix 16 12 4 -1 -4 16 1 192 256 144
Glenda 10 14 -2 1 -2 4 1 140 100 196
Henry 13 18 1 5 5 1 25 234 169 324
Ivory 7 10 -5 -3 15 25 9 70 49 100
Jerry 15 8 3 -5 -15 9 25 120 225 64
122 130 11 120 188 1597 1608 1878
= 12 = 13

a. r= ∑x’y’ / √ ∑(x’)2 ∑(y’)2

= 11 / √ ( 120 ) ( 188 )

= 11 / √ 22,560

= 11 / 150.20

r = 0.07
b. r = 10 ( 1597 ) - ( 122 ) ( 130 )
√ 10 ( 1608 ) – ( 14884 ) 10 ( 1878 ) – ( 16900 )

= 15970 - 15860
√ (16080 – 14884 ) ( 18780 – 16900 )

= 110
√ ( 1196 ) ( 1880 )

= 110
√ 2248480

= 110
1499.49

= 0.07

c. Interpretation:

There is a positive negligible correlation between x & y.