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2.6 Pearson’s Correlation Coefficient

Meaning and Calculation

  • Pearson’s correlation coefficient provides a quantitative method for determining the strength and direction of a numerical association.
  • It is denoted by a lower-case r and can be calculated using the following formula:

r=\frac{\sum_{i=1}^{n}\left(x_{i}-\bar{x}\right)\left(y_{i}-\bar{y}\right)}{(n-1) s_{x} s_{y}}

Where s_{x} and s_{y} are the standard deviations of the explanatory and response variables, respectively.

Limitations of using Pearson’s Correlation Coefficient

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