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Quantitative Techniques-II

Notes
Figure 10.8 : Very Low Negative Correlation (R = Near to 0 but Negative)

10.2.3 No Correlation

If the scatter diagram show the points which are highly spread over and show no trend or
patterns we can say that there is no correlation between the variables. Refer to Figure 10.9.

Figure 10.9: No Correlation (r = 0)

Linear Correlation

Two variables are said to be linearly related if corresponding to a unit change in one variable
there is a constant change in the other variable over the entire range of the values.
If two variables are related linearly, then we can express the relationship as
Y = a + b X

where ‘a’ is called as the “intercept” (If X= 0, then Y= a) and ‘b’ is called as the “rate of change” or
slope.
If we plot the values of X and the corresponding values of Y on a graph, then the graph would be
a straight line as shown in Figure 10.10.

Example:

X 1 2 3 4 5
Y 6 8 10 12 14

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