Business and Management
Submitted By mudassar
Correlation is a statistical technique that can show whether and how strongly pairs of variables are related. For example, height and weight are related; taller people tend to be heavier than shorter people. The relationship isn't perfect. People of the same height vary in weight, and you can easily think of two people you know where the shorter one is heavier than the taller one. Nonetheless, the average weight of people 5'5'' is less than the average weight of people 5'6'', and their average weight is less than that of people 5'7'', etc. Correlation can tell you just how much of the variation in peoples' weights is related to their heights.
Although this correlation is fairly obvious your data may contain unsuspected correlations. You may also suspect there are correlations, but don't know which are the strongest. An intelligent correlation analysis can lead to a greater understanding of your data.
Techniques in Determining Correlation
There are several different correlation techniques. The Survey System's optional Statistics Module includes the most common type, called the Pearson or product-moment correlation. The module also includes a variation on this type called partial correlation. The latter is useful when you want to look at the relationship between two variables while removing the effect of one or two other variables.
Like all statistical techniques, correlation is only appropriate for certain kinds of data. Correlation works for quantifiable data in which numbers are meaningful, usually quantities of some sort. It cannot be used for purely categorical data, such as gender, brands purchased, or favorite color.
Rating scales are a controversial middle case. The numbers in rating scales have meaning, but that meaning isn't very precise. They are not like quantities. With a quantity (such as dollars), the difference between…...