CORRELATION ANALYSIS

Correlation is single number that describes the degree of relationship between two variables

Correlation analysis is a process to find out the degree of relationship between two or more variable by applying various statistical tools

Example:price and supply

MEANING

It is used in deriving the degree and direction of relationship within the variable

It is used in developing the concept of regression

It is used in research work It is used reducing the range of

uncertainities in matter of prediction in the field of science this method are used

for making conclusions In the field of business

Uses of correlation analysis

Positive correlationwhen the value of two variable move in same

directionNegative correlationWhen the value of two varibles move in

opposite direction

Types of correlation

Simple correlation• correlation is said to be simple when only two varibles are analyse

Partial correlation

When three or more variable are considered for analysis but only in two influencing are studying and rest influencing varaible

Multiple correlation

In this three or more variables are studied

Linear correlation

If the amount of change in one variable leads to a constant ratio of change in another variable

Non linear correlation

If the amount in one variable is not in constant ratio to the change in the other variable

Importance of correlation analysis•Measure the degree of relation

•Estimating values of variables

•Understanding economic behaviour

THANK YOU