Calculating correlations

There are many different versions of correlation analysis, but they all do the same basic thing and you will not be required to distinguish between them. Before we jump into talking about correlation analysis, let’s take a moment to discuss the concept of correlation in a broader sense.

Correlation

A correlation is simply a relationship between two variables. If there is a relationship, it can be positive or negative. Earlier, in Chapter 6, Types of Analytics, we discussed using scatter plots to get a general idea about these relationships. Let’s use them as illustrations now. In Figure 10.9, we see what a positive correlation looks like:

Figure 10.9 – Positive correlation

A positive correlation means that as one variable increases, so does the other. This means that the dots form a loose line from the lower left to the upper right. For example, there is a positive correlation between the number of...