What is correlation and when would a researcher be intereste

What is correlation and when would a researcher be interested in determining the correlation among two or more variables?

Solution

Degree and type of relationship between any two or more quantities (variables) in which they vary together over a period; for example, variation in the level of expenditure or savings with variation in the level of income. A positive correlation exists where the high values of one variable are associated with the high values of the other variable(s). A \'negative correlation\' means association of high values of one with the low values of the other(s). Correlation can vary from +1 to -1. Values close to +1 indicate a high-degree of positive correlation, and values close to -1 indicate a high degree of negative correlation.

Correlation is computed into what is known as the correlation coefficient, which ranges between -1 and +1. Perfect positive correlation (a correlation co-efficient of +1) implies that as one security moves, either up or down, the other security will move in lockstep, in the same direction. Alternatively, perfect negative correlation means that if one security moves in either direction the security that is perfectly negatively correlated will move in the opposite direction. If the correlation is 0, the movements of the securities are said to have no correlation; they are completely random.

A researcher may be interested in determining the correlation among two or more variables in several real-life situations. For example, one may do correlational research to find out if stress levels are related to number of working hours, or to find out if the performance of students is related to the pocket money that they are given. An event coordinator for the upcoming craft fair may wish to study if there is a connection between attendance at craft fairs and the number of exhibitors who have booths at the fair. Such studies help in understanding if one variable really affects another or not.