Correlation

• The primary purpose of linear Correlation Analysis is to measure the strength of

linear association between two variables (X and Y).
• If X increases with no definite change in the value of Y, there is no correlation or
no association between X and Y.
• If X increases and there is a shift in the value of Y there is a correlation.
• The correlation is positive when Y tends to increase with an increase in X and
negative when Y tends to decrease with an increase in X.
• If the ordered pairs (X, Y) tend to follow a straight line path there is a linear
correlation.
• The preciseness of the shift in Y as X increases determines the strength of the
linear correlation.
• To conduct a linear correlation analysis we need:
– Bivariate Data – Two pieces of data that are variable
– Bivariate data is comprised of ordered pairs (X/Y)
– X is the independent variable
– Y is the dependent variable

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 Correlation Coefficient

Ho: No Correlation Ho ho ho….

Ha: There is Correlation

Ha ha ha….

The Correlation Coefficient always assumes a value between –1 and +1.

The Correlation Coefficient of the population, R, is estimated by the sample

Correlation Coefficient, r:

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 Types and Magnitude of Correlation

Strong Positive Correlation Moderate Positive Correlation Weak Positive Correlation

Output
Output
Output

Input Input Input

Strong Negative Correlation
Output
Moderate Negative Correlation Weak Negative Correlation
Output

Output
Input Input Input

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 Limitations of Correlation

• The magnitude of the Correlation Coefficient is somewhat relative and should be

used with caution.
• As usual statistical significance is judged by comparing a P-value with the chosen
degree of alpha risk.

• Guidelines for practical significance are as follows:

– If | r | > 0.80, relationship is practically significant

– If | r | < 0.20, relationship is not practically significant

Area of negative Area of positive

linear correlation No linear correlation linear correlation

-1.0 -0.8 -0.2 0 0.2 0.8 +1.0

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 Correlation Example

RB Stats Correlation.mtw

The Correlation Coefficient [r]:

• Is a positive value if one variable
increases as the other variable
increases.
• Is a negative value if one variable
decreases as the other increases.

Correlation Formula

( X i − X )(Yi − Y )
r=
( X i − X ) 2 (Yi − Y ) 2

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 Correlation Analysis

Graph>Scatter Plot>Simple…

Get outta my
way!

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 Correlation Example

Look at the graph. Do you observe any correlation in this graph?

Lowess stands for LOcally-WEighted Scatterplot Smoother.

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 Correlation Example

Correlation Coefficient is high and

the P-value is low. Reject the null
hypothesis; there is a correlation.

Results for: RB STATS CORRELATION.MTW

Scatterplot of Payton yards vs Payton carries
Correlations: Payton carries, Payton yards
Pearson correlation of Payton carries and Payton yards = 0.935
P-Value = 0.000
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 Regression Analysis

The last step to proper analysis of Continuous Data is to determine the

Regression Equation.

The Regression Equation can mathematically predict Y for any given X.

MINITABTM gives the BEST FIT for the plotted data.

Prediction Equations:
Y = a + bx (Linear or 1st order model)
Y = a + bx + cx2 (Quadratic or 2nd order model)
Y = a + bx + cx2 + dx3 (Cubic or 3rd order model)
Y = a (bx) (Exponential)
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 Simple versus Multiple Regression

Simple Regression:
– One X, One Y
– Analyze in MINITABTM using
• Stat>Regression>Fitted Line Plot or
• Stat>Regression>Regression

Multiple Regression:
– Two or More X’s, One Y
– Analyze in MINITABTM using:
• Stat>Regression>Regression

In both cases the R-sq value signifies the input

variation contribution on the output variation as
explained in the model.
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 Regression Analysis Graphical Output

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 Regression Analysis Statistical Output

Stat > Regression > Regression

R-Sq value of 87.3% = 1798587 / 2059413

R-Sq (adj) of 86.2% = (1798587 – 23711)/2059413

Mean Squares

R-Sq value of 87.3% quantifies the strength of the association between

Carries and Yards. In this case our Prediction Equation explains 87.3% of
the total variation seen in “Yards”. 12.7% of the variation seen in “Yards”
is not explained by our equation.
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 Regression (Prediction) Equation

Constant Level of X

Coefficient

The solution:
Payton yards = - 163.497 + 4.91622(250) = 1,065.6

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 Regression (Prediction) Equation

Compare to the Fitted Line.

~1067 yds

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 Regression Graphical Output

For a demonstration check other Regression fits.

Stat>Regression>Fitted Line Plot

Quadratic and Cubic – Check the r2 value against the linear model
to determine if the difference between the variance explained by
our equation is significant.

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 Regression Graphical Output

Quadratic

If the R-Sq value improves Cubic

significantly or if the assumptions
of the residuals are better met as a
result of utilizing the quadratic or
cubic equation you will want to use
the best fitting equation.

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 Residuals

As in ANOVA the residuals should:

– Be Normally Distributed (normal plot of residuals)
– Be independent of each other
• no patterns (random)
• data must be time ordered (residuals vs. order graph)
– Have a constant variance (visual, see residuals versus fits chart, should
be (approximately) same number of residuals above and below the
line, equally spread.)

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