Correlation
When two sets of data are powerfully linked together we say they have a High Correlation .
The give voice Correlation is made of Co- ( meaning “ together ” ), and Relation
- Correlation is Positive when the values increase together, and
- Correlation is Negative when one value decreases as the other increases
A correlation coefficient is assumed to be linear ( following a telephone line ) .
correlation coefficient can have a measure :
Reading: Correlation
- 1 is a perfect positive correlation
- 0 is no correlation (the values don’t seem linked at all)
- -1 is a perfect negative correlation
The rate shows how good the correlation is ( not how exorbitant the line is ), and if it is positive or negative .
Example: Ice Cream Sales
The local anesthetic ice cream denounce keeps chase of how much ice cream they sell versus the temperature on that day. here are their figures for the last 12 days :
Ice Cream Sales vs Temperature | |
Temperature °C | Ice Cream Sales |
---|---|
14.2° | $215 |
16.4° | $325 |
11.9° | $185 |
15.2° | $332 |
18.5° | $406 |
22.1° | $522 |
19.4° | $412 |
25.1° | $614 |
23.4° | $544 |
18.1° | $421 |
22.6° | $445 |
17.2° | $408 |
And here is the lapp datum as a Scatter plot :
We can easily see that warmer weather and higher sales go together. The relationship is good but not perfective .
In fact the correlation coefficient is 0.9575 … examine at the goal how I calculated it .
Also try the
Correlation Is Not Good at Curves
besides try the Correlation Calculator The correlation calculation only works properly for square line relationships .
Our Ice Cream Example: there has been a heat wave!
It gets so hot that people are n’t going near the workshop, and sales start dropping .
here is the latest graph :
The correlation value is now 0 : “ No correlation ” … !
The calculated correlation coefficient value is 0 ( I worked it out ), which means “ no correlation ” .
But we can see the data follows a nice curve that reaches a peak around 25° C .
But the correlation calculation is not “ fresh ” adequate to see this .
Moral of the narrative : make a Scatter Plot, and count at it !
You may see a kinship that the calculation does not .
“Correlation Is Not Causation”
A common suppose is “ Correlation Is not Causation ” .
What it really means is that a correlation coefficient does not prove one thing causes the other :
- One thing might cause the other
- The other might cause the first to happen
- They may be linked by a different thing
- Or it could be random chance!
There can be many reasons the data has a good correlation coefficient.
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Example: Sunglasses vs Ice Cream
Our Ice Cream shop finds how many sunglasses were sold by a big store for each day and compares them to their frost cream sales :
The correlation between Sunglasses and Ice Cream sales is high
Does this mean that sunglasses make people want ice cream ?
Example: Poor suburbs are more likely to have high pollution.
Why ?
- Do poor people make pollution?
- Are polluted suburbs the only place poor people can afford?
- Is it a common link, such as factories with low paying jobs and lots of pollution?
Example: A Real Case!
A few years ago a sketch of employees found a strong positive correlation between “Studying an external course” and Sick Days .
Does this mean :
- Studying makes them sick?
- Sick people study a lot?
- Or did they lie about being sick so they can study more?
Without foster research we ca n’t be indisputable why .
How To Calculate
How did I calculate the respect 0.9575 at the top ?
I used “ Pearson ‘s correlation ”. There is software that can calculate it, such as the CORREL ( ) function in Excel or LibreOffice Calc …
… but here is how to calculate it yourself:
Let us call the two sets of data “ x ” and “ yttrium ” ( in our case Temperature is x and Ice Cream Sales is y ) :
- Step 1: Find the mean of x, and the mean of y
- Step 2: Subtract the mean of x from every x value (call them “a“), and subtract the mean of y from every y value (call them “b“)
- Step 3: Calculate: ab, a2 and b2 for every value
- Step 4: Sum up ab, sum up a2 and sum up b2
- Step 5: Divide the sum of ab by the square root of [(sum of a2) × (sum of b2)]
hera is how I calculated the beginning Ice Cream exemplar ( values rounded to 1 or 0 decimal places ) :
As a formula it is :
Where :
- Σ is Sigma, the symbol for “sum up”
- is each y-value minus the mean of y (called “b” above)
You credibly wo n’t have to calculate it like that, but at least you know it is not “ magic ”, but simply a routine set of calculations .
Note for Programmers
You can calculate it in one pass through the data. Just sum up x, y, x2, y2 and xy ( no want for a or b calculations above ) then use the formula :
Other Methods
There are other ways to calculate a correlation coefficient, such as “ Spearman ‘s rank correlation coefficient coefficient ” .