Meaning and Types of Correlation

Correlation is a statistical calculation that indicates in which the two variables are parallelly related (which means that the variables change together at a constant rate). It’s a simple and popularly used tool for defining relationships without delivering a statement concerning the cause and effect. In simple words, correlation is a statistical calculation that estimates the point at which the two variables shift in relation to each other.

A positive and perfect correlation indicates that the coefficient correlation is exactly 1. It indicates that when one variable moves upward or downward, another variable move is structured in the same direction. However, a negative and perfect correlation indicates that both the variables move in opposite directions. When there is a zero correlation it means there is no relationship at all.

Different Types of Correlation

(A) MEANING OF CORRELATION
  • Two variables can have some kind of relationship i.e. change in one may accompany the change in another. Like, Price & Demand, Height & Weight, Temperature & Demand for Soft Drinks etc.
  • If a change in the value of one variable accompanies/causes simultaneous change in the other variable in the same or opposite direction, it is termed as correlation. Or these variables are said to be correlated.
(B) TYPES OF CORRELATION
  • There are the following three types of correlation:
  1. Positive & Negative Correlation;
  2. Linear & Non-Linear Correlation;
  3. Simple, Multiple and Partial Correlation.
Q.1 If a change in the value of one variable accompanies/causes a simultaneous change in the other variable in the same or opposite direction, it is termed as ______________.
a. Range

b. Dispersion

c. Correlation

d. Variation

Q.2 How many types of correlation are there?
a. 4

b. 5

c. 2

d. 3

Q.3 Which of the following is not a type of correlation?
a. Positive Correlation

b. Negative Correlation

c. Simple Correlation

d. None of the above

The above mentioned is the concept, that is elucidated in detail about the ‘Correlation’ for the class 11 Commerce students. To know more, stay tuned to BYJU’S.