Coefficients of correlation and determination
In this section, we will discuss two related notions – coefficients of correlation and coefficients of determination.
Coefficients of correlation
A coefficient of correlation is a measure of the statistical linear relationship between two variables and can be computed using the following formula:
r = 1 _ n − 1 Σ i=1 n (x i − ‾ x _ s x )(y i − ‾ y _ s y )
The reader can go here – https://shiny.rit.albany.edu/stat/corrsim/ – to simulate the correlation relationship between two variables.
Figure 6.3 – Simulated bivariate distribution
By observing the scatter plots, we can see the direction and the strength of the linear relationship between the two variables and their outliers. If the direction is positive (r>0), then...
