Correlation analysis is used to find the degree of relationship between two or more variables by applying statistical tools. It produces a correlation coefficient that describes the strength and direction of the relationship. There are different types of correlation, including positive correlation where variables move in the same direction, negative correlation where they move in opposite directions, simple correlation between two variables, partial correlation controlling for other variables, and multiple correlation between three or more variables. Correlation analysis is important for measuring the degree of relationship between variables, estimating their values, and understanding economic behavior.

2.  Correlation is single number that describes
the degree of relationship between two
variables
 Correlation analysis is a process to find out
the degree of relationship between two or
more variable by applying various statistical
tools
 Example:price and supply

3.  It is used in deriving the degree and direction
of relationship within the variable
 It is used in developing the concept of
regression
 It is used in research work
 It is used reducing the range of uncertainities
in matter of prediction
 in the field of science this method are used
for making conclusions
 In the field of business

4.  Positive correlation
when the value of two variable move in same
direction
Negative correlation
When the value of two varibles move in
opposite direction

5. Simple correlation
• correlation is said to be simple when only
two varibles are analyse
Partial correlation
When three or more variable are considered
for analysis but only in two influencing are
studying and rest influencing varaible
Multiple correlation
In this three or more variables are studied

6. Linear correlation
If the amount of change in one variable leads to a
constant ratio of change in another variable
Non linear correlation
If the amount in one variable is not in constant ratio to
the change in the other variable

7. Importance of correlation analysis
•Measure the degree of relation
•Estimating values of variables
•Understanding economic behaviour

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