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CORRELATION – KARL PEARSON’S 
COEFFICIENT OF CORRELATION-
INTERPRETATION OF CORRELATION 
COEFFICIENT
Page 3


CORRELATION – KARL PEARSON’S 
COEFFICIENT OF CORRELATION-
INTERPRETATION OF CORRELATION 
COEFFICIENT
MEANING OF CORRELATION
• The method of correlation is developed by     
Francis Galton in 1885.
• It is the relationship between two sets of scores 
or variables.
• Whenever two variables of the same group are so 
related that the increase or decrease are 
correspond to the increase or decrease to 
another or conversely , increase or decrease 
corresponds to the decrease or increase to 
another ,they are said to be correlated.
Page 4


CORRELATION – KARL PEARSON’S 
COEFFICIENT OF CORRELATION-
INTERPRETATION OF CORRELATION 
COEFFICIENT
MEANING OF CORRELATION
• The method of correlation is developed by     
Francis Galton in 1885.
• It is the relationship between two sets of scores 
or variables.
• Whenever two variables of the same group are so 
related that the increase or decrease are 
correspond to the increase or decrease to 
another or conversely , increase or decrease 
corresponds to the decrease or increase to 
another ,they are said to be correlated.
TYPES OF CORRELATION
On the basis of direction of the relation 
between variables, there are three types of 
correlation. That are , 
1. Positive Correlation
2. Negative Correlation
3. Zero Correlation 
Page 5


CORRELATION – KARL PEARSON’S 
COEFFICIENT OF CORRELATION-
INTERPRETATION OF CORRELATION 
COEFFICIENT
MEANING OF CORRELATION
• The method of correlation is developed by     
Francis Galton in 1885.
• It is the relationship between two sets of scores 
or variables.
• Whenever two variables of the same group are so 
related that the increase or decrease are 
correspond to the increase or decrease to 
another or conversely , increase or decrease 
corresponds to the decrease or increase to 
another ,they are said to be correlated.
TYPES OF CORRELATION
On the basis of direction of the relation 
between variables, there are three types of 
correlation. That are , 
1. Positive Correlation
2. Negative Correlation
3. Zero Correlation 
POSITIVE CORRELATION
If when the first variable increases or 
decreases the other also increases or 
decreases respectively their relationship is 
said to be Positive correlation , because they 
move in the same direction.
Eg. Intelligence and Achievement
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FAQs on PPT - Karl Pearson's Coefficient of Correlation - Business Mathematics and Statistics - B Com

1. What is Karl Pearson's Coefficient of Correlation?
Ans. Karl Pearson's Coefficient of Correlation is a statistical measure that quantifies the strength and direction of the linear relationship between two variables. It is denoted by the symbol "r" and ranges from -1 to +1. A positive value of r indicates a positive correlation, a negative value indicates a negative correlation, and a value close to zero indicates no correlation.
2. How is Karl Pearson's Coefficient of Correlation calculated?
Ans. Karl Pearson's Coefficient of Correlation is calculated by dividing the covariance of the two variables by the product of their standard deviations. The formula for calculating r is: r = (Σ((X - X̄) * (Y - Ȳ))) / (n * σx * σy) Where Σ represents the summation, X and Y are the individual data points, X̄ and Ȳ are the means of X and Y, n is the number of data points, and σx and σy are the standard deviations of X and Y, respectively.
3. What does a value of 0 mean for Karl Pearson's Coefficient of Correlation?
Ans. A value of 0 for Karl Pearson's Coefficient of Correlation indicates no linear relationship between the two variables. This means that there is no consistent pattern or trend in the data that can be described by a straight line. However, it is important to note that a value of 0 does not imply the absence of any relationship between the variables, as there could still be a non-linear relationship present.
4. Can Karl Pearson's Coefficient of Correlation be greater than 1?
Ans. No, Karl Pearson's Coefficient of Correlation cannot be greater than 1. The range of r is from -1 to +1, where -1 represents a perfect negative correlation, +1 represents a perfect positive correlation, and 0 represents no correlation. Values outside this range are not possible and indicate an error in calculation or interpretation.
5. How does Karl Pearson's Coefficient of Correlation help in data analysis?
Ans. Karl Pearson's Coefficient of Correlation is a useful tool in data analysis as it provides insights into the relationship between two variables. It helps in determining the strength and direction of the relationship, allowing researchers to make predictions, identify patterns, and draw conclusions. It is commonly used in fields such as economics, social sciences, and finance to analyze data and make informed decisions based on the correlation between variables.
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