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Linear Correlation (Correlation Analysis - Association between two variables)

Scatter Diagram Method-1 Perfect Negative Correlation

This is very simple method of studying the relationship between two variables. If n pairs of observations (x1,y1), (x2, y2), (x3, y3) … (xn, yn) of two variables are given, they can be plotted on a graph paper. The diagram formed by the points on the graph paper is known as scatter diagram. Looking to the distribution points in the scatter diagram we can know the direction of the relationship and also get a rough idea about the degree of the relationship between the variables.

Perfect Negative Correlation:

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1) All the points of the scatter diagram are in one straight line, which shows perfect relationship.

2) The line goes from the upper left to the lower right, which shows the negative relationship.

Thus, the correlation between the two variables is perfect negative.

Here the changes in the values of two variables are in the opposite direction and are proportional.

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