0Correlation Analysis:
Correlation analysis is defined as the study of relationship between variables and helps in determining the degree of relationship between variables.
Example: Relationship between price and demand,income and expenditure etc.
Types: Correlation can be broadly classified into the following types: Positive, Negative, Simple, Multiple, Partial, Linear and Curvilinear.
- Positive correlation: When both variables are varying in the same direction (increase or decrease together), then correlation is said to be positive.
- Negative correlation: When both variables are varying in the opposite direction(if one increases, the other decreases or vice versa), then correlation is said to be negative.
- Simple correlation: When only two variables are studied, it is Simple correlation.
- Multiple correlation: When more than two variables are studied simultaneously, it is Multiple correlation.
- Partial correlation: When only two variables are studied partially,in presence of more than two variables, it is Partial correlation.
- Linear correlation: If two variables tend to bear a constant ratio, it is Linear correlation.
- Curvilinear correlation: If two variables donot bear a constant ratio, it is Curvilinear correlation.
- Correlation coefficient always lies between -1 and +1.
