6.3 Types of Correlation

Positive and negative correlation
 Linear and nonlinear correlation
A) If two variables change in the same
direction (i.e. if one increases the other also increases, or if
one decreases, the other also decreases), then this is called a
positive correlation. For example : Advertising and sales.
B) If two variables change in the opposite
direction ( i.e. if one increases, the other decreases and vice
versa), then the correlation is called a negative correlation.
For example : T.V. registrations and cinema attendance.

The nature of the graph gives us the idea
of the linear type of correlation between two variables. If
the graph is in a straight line, the correlation is called a
"linear correlation" and if the graph is not in a
straight line, the correlation is nonlinear or curvilinear.
For example, if variable x changes by a constant quantity, say 20 then y also changes by a constant quantity, say 4. The ratio between the two always remains the same (1/5 in this case). In case of a curvilinear correlation this ratio does not remain constant.

Index
6. 1 Introduction
6. 2 Correlation
6. 3 Types of Correlation
6. 4 Degrees of Correlation
6. 5 Methods of determining correlation
6. 6 Coefficients of Correlation for Bivariate
Grouped Data
6. 7 Probable Error
6. 8 Rank Correlation Coefficient
6. 9 Linear Regression
Chapter 7
