Significance of correlation, Applied Statistics

Assignment Help:

Significance of Correlation

The study of correlation is of immense use in practical life. Correlation analysis contributes to the understanding of economic behavior, aids in locating the critically important variables on which others depend, may reveal to the economist the connection by which disturbances spread and suggest to him the paths through which stabilizing forces may become effective.

In business, correlation analysis enables the executive to estimate costs, sales, prices and other variables on the basis of some other series with which these costs, sales, or prices may be functionally related.

Some of the guesswork can be removed from decisions when the relationship between a variable to be estimated and the one or more variables on which it depends are close and reasonably invariant.

However, it should be noted that coefficient of correlation is one of the most widely used and also one of the most widely abused statistical measures. It is abused in the sense that one sometimes overlooks the fact that correlation measures nothing but the strength of linear relationship and that it does not necessarily imply a cause-effect relationship.

 


Related Discussions:- Significance of correlation

Advantages of mode, Advantages By definition, mode is the most typic...

Advantages By definition, mode is the most typical or representative value of a distribution. Hence, when we talk of modal wage, modal size of shoe or modal size of family i

Confidence interval for a proportion, The quick method for a confidence int...

The quick method for a confidence interval for a proportion uses as an approximation for a 95% confidence interval.  The margin of error in this case is slightly larger tha

Sampling theory, difference between large sample test and small sample test...

difference between large sample test and small sample test

Calculation of degrees of freedom, Calculation of Degrees of Freedom Fi...

Calculation of Degrees of Freedom First we look at how to calculate the number of DOF for the numerator. In the numerator since we calculate the variance from the sample means,

Which average is to be used to describe statistical data?, There ar...

There are situations where none of the three averages is fully satisfactory. For example, if the number of items in a series is very small, none of these av

SPSS Program, I have 5 observations that i must plug into spss. I need an e...

I have 5 observations that i must plug into spss. I need an example of 1. I do not know if you are familiar with SPSS but I am going to ask anyway. Subject 1 is a Hispanic male who

Applications of standard error, Applications of Standard Error   ...

Applications of Standard Error   Standard Error is used to test whether the difference between the sample statistic and the population parameter is significant or is d

Sample, You want to know the thoughts of air travelers in fields such as ti...

You want to know the thoughts of air travelers in fields such as tickets, comffort, safety, securuty, services and economic growth. You are given a database and 20 questions to ask

Harmonic mean, Harmonic Mean  The harmonic mean  also called harmonic  ...

Harmonic Mean  The harmonic mean  also called harmonic  average, in the total numbers of items of variable divided by the sum of r reciprocals of the values of the variable. In

Data project, Dr. Jim Mirabella UNIT EIGHT: DATA ANALYSIS PROJECT All Excel...

Dr. Jim Mirabella UNIT EIGHT: DATA ANALYSIS PROJECT All Excel output should be copied into a single Word document where you must enter all of your responses to the questions below.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd