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MODULE

PERIDO, JAYPHER A. BSBA FM 3-1

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Pearson Correlation Coefficient
Pearson correlation coefficient, also known as Pearson R statistical test, measures the
strength between the different variables and their relationships. Therefore, whenever any
statistical test is conducted between the two variables, it is always a good idea for the person
analyzing to calculate the value of the correlation coefficient to know how strong the
relationship between the two variables is.

Pearson’s correlation coefficient can range from the value +1 to the value -1, where +1
indicates the perfect positive relationship between the variables considered, -1 indicates the
perfect negative relationship between the variables considered, and 0 value indicates that no
relationship exists between the variables considered.

Formula on how to calculate Pearson Correlation Coefficient:

Standard Deviation and Variance

Variance and Standard Deviation are the important measures used in Mathematics and
Statics to find the meaning from a large set of data. The different formulas for Variance and
Standard Deviation are highly used in mathematics to determine the trends of various values
in mathematics. Variance is the measure of how the data points vary according to the mean
while standard deviation is the measure of the central tendency of the distribution of the data.

The major difference between variance and standard deviation is in their units of
measurement. Standard deviation is measured in a unit similar to the units of the mean of
data, whereas the variance is measured in squared units. Here in this article, we will learn
about variance and standard deviation including their definitions, formulas, and their
differences along with suitable examples in detail.

Variance
Variance is defined as, “The measure of how far the set of data is dispersed from their mean
value”. Variance is represented with the symbol σ2. In other words, we can also say that the
variance is the average of the squared difference from the mean.

Properties of Variance

Various properties of the Variance of the group of data are,

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  As each term in the variance formula is firstly squared and then their mean is found, it
is always a non-negative value, i.e. mean can be either positive or can be zero but it
can never be negative.
 Variance is always measured in squared units. For example, if we have to find the
variance of the height of the student in a class, and if the height of the student is given
in cm then the variance is calculated in cm2.

Formula for Sample Variance

Standard Deviation
How far our given set of data varies along with the mean of the data is measured in standard
deviation. Thus, we define standard deviation as the “spread of the statistical data from the
mean or average position”. We denote the standard deviation of the data using the symbol σ.

We can also define the standard deviation as the square root of the variance.

Formula for Sample Standard Deviation

Linear Regression
Linear regression is the most basic and commonly used predictive analysis. One variable is
considered an explanatory variable, and the other is considered a dependent variable. For
example, a modeler might want to relate the weights of individuals to their heights using a
linear regression model.
There are several linear regression analyses available to the researcher.

Simple linear regression

 One dependent variable (interval or ratio)
 One independent variable (interval or ratio or dichotomous)
Multiple linear regression
 One dependent variable (interval or ratio)
 Two or more independent variables (interval or ratio or dichotomous)
Logistic regression
 One dependent variable (binary)
 Two or more independent variable(s) (interval or ratio or dichotomous)
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Ordinal regression
 One dependent variable (ordinal)
 One or more independent variable(s) (nominal or dichotomous)
Multinomial regression
 One dependent variable (nominal)
 One or more independent variable(s) (interval or ratio or dichotomous)
Discriminant analysis
 One dependent variable (nominal)
 One or more independent variable(s) (interval or ratio)

Formula for linear regression equation is given by:

Y= a+bx
a and b are given by the following formulas:

Where,
x and y are two variables on the regression line.
b = Slope of the line.
a = y-intercept of the line.
x = Values of the first data set.
y = Values of the second data set.

Exponential Growth
The exponential growth formula is used to express a function of exponential growth. To
recall, exponential growth occurs when the growth rate of the value of a mathematical
function is proportional to the function’s current value, resulting in its growth with time
being an exponential function. In other words, when the growth of a function increases
rapidly about the increase in the total number, then it is exponential.

Formula of Exponential Growth