Question

You have been asked to calculate the Pearson’s correlation coefficients for the variables of a data set. The data set consists of a number of variables and a number of observations of those variables. Discuss how you might improve the computational performance of Pearson’s correlation on this data set if it consists of a) a large number of observations and a small number of variables, and b) a large number of variables and a small number of observations

Answer 1

a)

a large number of observations and a small number of variables

Use excel inbuild function CORREL.

b)

a large number of variables and a small number of observations

using excel correlation from data analysis under the data tab.

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The value of the correlation coefficient ranges from -1 to 1. Where -1 and +1 denotes perfect negative and positive linear relationship between two variables. And 0 denotes no linear relationship between two variables.

• correlation coefficient between [.7, 1] implies a strong positive linear relationship
• correlation coefficient between [.5, .7] implies a moderate positive linear relationship
• correlation coefficient between [.3, .5] implies a weak positive linear relationship
• correlation coefficient between [-.2, .2] implies no linear relationship
• correlation coefficient between [-1, -.7] implies a strong negative linear relationship
• correlation coefficient between [-.7, -.5] implies a moderate negative linear relationship
• correlation coefficient between [-.3, -.5] implies a weak negative linear relationship