2. Scatter Diagram:
The simplest method of investigating the relationship
between two variables is to plot a scatter diagram
Let there will be two series ‘x’ (Independent Variable) and
‘y’ (Dependent Variable) to be represented graphically.
Take the items in ‘x’ series along the axis of ‘x’ and the
corresponding items in ‘y’ series along the y-axis. The
diagram so formed will be a dotted one and scattered,
showing some relationship, such a diagram is called a
scattered.
3. Scatter diagram can be used to find that there is any
correlation between the variable, whether the correlation
is linear or non- linear and whether it is positive or
negative.
Interpretation of correlation is done in the following ways.
4. Linear Correlation:-
If all the points on the scatter diagram tend to lie near a line,
the correlation is said to be linear.
5. Curvi Linear Correlation:-
If all the points on the scatter diagram tend to lie near
a smooth curve (not a straight line) the correlation is
said to be curvilinear.
6. Positive Linear Correlation:-
If all the points tend to lie near an upward sloping line ,
the linear correlation is said to be positive correlation.
7. Negative Linear Correlation:-
If all the points tend to lie on a downward sloping line,
the linear correlation is said to be negative correlation.
8. Perfect Positive Correlation:-
If all the points tend to lie on an upward sloping line
the correlation is perfectly positive correlation.
9. Perfect Negative Correlation:-
If all the points tend to lie on a downward sloping line the
correlation is perfectly negative correlation.
10. Null Correlation:-
If the points on a scatter diagram do not show a definite
movement then there is no correlation between the variables.
