Activity Correlation

A correlation coefficient is a number between -1 and 1 that tells you the strength and

direction of a relationship between variables.

In other words, it reflects how similar the measurements of two or more variables are
across a dataset.

Correlation coefficient value Correlation type Meaning

When one variable changes, the
Perfect positive
1 other variables change in the
correlation
same direction.
There is no relationship between
0 Zero correlation
the variables.
When one variable changes, the
Perfect negative
-1 other variables change in the
correlation
opposite direction.
Positive Correlation
A positive correlation—when the correlation coefficient is greater than 0—
signifies that both variables tend to move in the same direction. When ρ is +1, it
signifies that the two variables being compared have a perfect positive relationship;
when one variable moves higher or lower, the other variable moves in the same
direction with the same magnitude.
Negative Correlation
A negative (inverse) correlation occurs when the correlation coefficient is less
than 0. This is an indication that both variables move in the opposite direction. In short,
any reading between 0 and -1 means that the two securities move in opposite
directions. When ρ is -1, the relationship is said to be perfectly negatively correlated.
In short, if one variable increases, the other variable decreases with the same
magnitude (and vice versa). However, the degree to which two securities are
negatively correlated might vary over time (and they are almost never exactly
correlated all the time).
Activity (to be submitted next week – Monday)
State each case whether you would expect a positive correlation, a negative, or no
correlation.
1. Working hours of employee and 28. IQ and age of extremely deprived

income earned. children.
2. Time spent in the office and time 29. Population and number of fast food
spent in the family. chain in cities.
3. Weight of a car and miles per 30. Number of cigarettes smoked and
gallon. lung cancer incidence.
4. School achievement and days 31. Ice cream sales and outside
absent from school. temperature.
5. Cholesterol level and incidence of 32. Height and shoe size.
coronary heart disease. 33. Ages of husbands and wives.
6. Vaccinations and illness. 34. Reading achievement and body built
7. Depression and suicide. of a person.
8. Outside temperature and layers of 35. Educational attainment and salary.
clothing needed. 36. Height above sea level and
9. Amount of time spent studying and temperature.
examination scores. 37. Amount of tea drunk and level of
10. IQ level and Grade Point Average. intelligence.
11. Singing ability and writing ability. 38. Shoe size and salary.
12. Mileage a car has been driven and 39. Time spent from business marketing
selling price. and number of clients.
13. Shoe size and IQ level. 40. Poverty and crime levels.
14. The number of hours a bowler 41. A person running and the number of
practice and their scores. stars in the sky.
15. Income and educational attainment. 42. Savings and financial security.
16. Shirt size and sense of humor. 43. Price and demand of certain
17. Weight and height of people. commodity.
18. Age and incidence of Alzheimer’s 44. The number of sunny days in July in
disease. Manila and the attendance at the
19. Income and expenditure. Manila Zoo.
20. Walking distance and calories 45. The number of television
burned. commercials broadcast and sales of
21. Amount of exercise and percent of its product.
body fat. 46. The number of campaign materials
22. Hours in the sun and severity of sun used by a senatorial candidate and
burned. the number of votes earned.
23. Age and the number of medical 47. Number of person’s hand and its
conditions. grade point average in school.
24. Time spent in casino and chance of 48. Length of lifeline of a person’s hand
winning, and its grade point average in
25. Stress level and blood pressure school.
reading. 49. Measure of self-esteem and
26. Board examination performance and measure of paranoia of psychiatric
weight of a person. patients.
27. Weight and educational 50. Driving distance and the number of
attainment. traffic lights passed through.

Activity Correlation

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A correlation coefficient is a number between -1 and 1 that tells you the strength and

direction of a relationship between variables.

Correlation coefficient value Correlation type Meaning

1. Working hours of employee and 28. IQ and age of extremely deprived

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