Page 206 - DMGT209_QUANTITATIVE_TECHNIQUES_II

Unit 10: Correlation

Notes
Examples:
1. Price and demand of a commodity

2. Sale of Woolen garments and the day temperature.

Perfect Negative Correlation

If the variables X and Y are perfectly negatively related to each other then, we get a graph as
shown in Figure 10.6.
Figure 10.6: Perfect Negative Correlation (R = - 1)

Very High Negative Correlation

If the variables X and Y are related to each other with a very high degree of negative relationship
then we can notice a graph as in Figure 10.7.

Figure 10.7 : Very High Negative Correlation (R = Near To - 1)

Very Low Negative Correlation

If the variables X and Y are related to each other with a very low degree of negative relationship
then we can notice a graph as in Figure 10.8.

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