Correlation Regression Analysis

Some main definitions of correlation are given below:

"The Correlation analysis deals with the association between two or more variables. If two or more quantities vary in sympathy so that the movements in one tend to be accompanied by corresponding movements in the other (so then they are said to be correlated). When the relationship is of a quantitative nature, the appropriate statistical tool for discovering and measuring the relationship and expressing it in short formula is termed as corrosion. The Correlation analysis attempts to determine the degree of relationship between variables. The Correlation is an analysis of the co variation between two or more variables."

Thus the correlation is a statistical device that helps us in analyzing the co variation of two or more variables.

The Correlation analysis contributes to the understanding of an economic behavior, aids in locating the critically important variables on which other depends, may reveal to the economist the connection by which disturbances spread and suggest to him the paths through which stabilizing forces may become more 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 sales, costs, or prices may be functionally related. Some of the guess work can be removed from decisions when the relationship between a variable is to be estimated and the one or more other variables on which it depends are close and reasonably invariant.

Regression analysis

The dictionary meaning of the term 'regression' is the act of returning or going back. The word 'regression' was first used by the Sir Francis Galton (1822-1910). In the year 1877 while studying the relationship between the height of fathers and send. This word was introduced by him in the paper 'regression towards mediocrity in hereditary stature'. His study of height of about one 1000 fathers and some revealed a very intrusting relationship, i.e. the tall fathers tend to have tall sons and short fathers tends to have short sons, but the average height of the sons of a group of tall fathers is less than that of the fathers than that of the fathers. The line explaining the tendency to regress or going back was termed by Galton a regression line.' The term is still used to describe that the line drawn for a group of points to show the present trend , but it is no longer necessarily carries the original implication of ''stepping back'' that Galton the term estimating line instead of regression line as the expression estimating line is more clarification in character.

Some of its main important topics are:

1. Coefficient determination

2. Concurrent deviation method

3. Correlation causation

4. Correlation in short term

5. Correlation grouped data

6. Regression analysis

7. Karl Pearson's coefficient correlation

8. Lag lead correlation

9. Probable error

10. Rank correlation coefficient

11. Regression equation

12. Correlation significance

13. Regression uses