The document discusses different types and methods of studying correlation. It describes positive and negative, linear and non-linear, simple, partial and multiple, and real and spurious correlations. Two main methods of studying correlation mentioned are scatter diagrams and Karl Pearson's coefficient of correlation. Scatter diagrams are simple to understand but don't show the degree of correlation, while Pearson's coefficient measures the closeness of the relationship between -1 and 1 and indicates the direction.

1. TYPES OF CORRELATION
• Positive and negative correlation
• Linear and non-linear correlation
• Simple, partial and multiple correlations
• Real and spurious correlations

2. METHODS OF STUDYING CORRELATION
• Scatter diagram
• Karl Pearson’s coefficient of correlation
• Rank correlation method

3. METHODS OF STUDYING CORRELATION
• Scatter diagram

4. METHODS OF STUDYING CORRELATION
Scatter diagram
Merits
• Very simple to study
• Easy to understand
• Extreme values don’t affect
Demerits
• Idea about direction not amount/degree
• Large number of observations

5. METHODS OF STUDYING CORRELATION
• Karl Pearson’s coefficient of correlation

6. METHODS OF STUDYING CORRELATION
Karl Pearson’s coefficient of correlation
Properties
• Measure of closeness/relationship
• May be +ve or –ve
• -1 to +1
• If r = 0, -1, +1
• Independent of change of scale and origin
• GM of two regression coefficients
• Low (0 to 0.3), med (0.3 to 0.6), high (>0.6).

7. METHODS OF STUDYING CORRELATION
Karl Pearson’s coefficient of correlation
Merits
• Measure of degree/amount/magnitude of
correlation
• Provides an idea about the direction of rel.
Demerits
• Affected by extreme values
• Assumes linear relationship between two variables
• Time consuming
• Only for quantitative variables

8. METHODS OF STUDYING CORRELATION
Spearman’s Rank correlation