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When do you use correlations?
- correlations are used for testing relationships between interval variables.
- the null hypothesis of the correlation test is that no relationship exists between the interval variables in the population; they are independent.
Scatterplots
- direction
- form
- strength
- outliers
Direction
positive relationship - goes upwards
negative relationship - goes downwards
Form
- linear (strong)
- curved (moderate)
- no pattern (weak)
Outliers
Data points significantly different from others. It does no fit the typical pattern or trend of the rest of the group.
Correlations
a measure of how strong of a linear relationship between two variables - gives a correlation coefficient. The two variables must be INTERVAL variables.
*Don't apply correlation to categorical data masquerading as quantitative
*Check that you know the variables' units and what they measure.
Outlier Conditions
- outliers can distort the correlation dramatically
- an outlier can. make an otherwise small correlation look big, or hide a large correlation
- it can even give an otherwise positive association a negative correlation coefficient (and vice versa)
- when you see an outlier, it's often a good idea to report the correlations with and without that point
Correlation Properties
the sign of a correlation coefficient gives the direction of the association
Correlation is always between -1 and +1
strong correlation: close to -1 or +1
weak correlation: near zero
Correlation does not equal causation
whenever we have a strong correlation, it is tempting to explain it by imagining that the predictor variable has caused the response to help.
- scatterplots and correlation coefficient never prove causation
- a hidden variable that stands behind a relationship and determines it by simultaneously affecting the other two variables is called a lurking variable.
Lurking variable example
Observed association:
- # of firefighters (X)
- amount of damage (Y)
Lurking variable:
- seriousness of the fire which can affect both X and Y
When there's a correlation between A&B, There are usually 5 possibilities
- A causes B
- B causes A
- A and B both partly cause each other
- A and B are both caused by a third factor, C
- The observed correlation was due purely to chance