## Sunday, January 18, 2009

### Type of Correlation

1. Perfect Correlation

When the two variables vary in such a manner that their ratio is always constant , the correlation is said to be perfect .

Consider two variables as diameter and circumference of a circle . We know that circumference is always a fixed number times of diameter . When diameter varies , the circumference also varies and the ratio of variation is always the same . In this case , correlation is perfect .

Perfect correlation is of two types :

(i) Perfect positive correlation

(ii) Perfect negative correlation

When the value of two variables move in the same direction to that an increase in the value of one variable also , and a decrease in the value of one variable is associated with the proportional decrease in the value of other variable also , correlation is said to be positive , if on the other hands , the values of two variables move in different directions , so that with an increase in the value of one variable the value of the other variable , decreases proportionally , correlation is said to be negative .

2. No Correlation

If the change in one variable do not result in change in other , then the two variables are said to be uncorrelated . In this case , there is zero correlation between them.

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