You can look at the scatter plot and see that a linear relationship seems reasonable, and you can identify a positive or negative trend, but how can you tell more about this relationship? While it is always good practice to first examine things visually, you may find that deciphering a scatter plot can be tricky, especially when it comes to the strength of a relationship. The next step is then to calculate numerical measures of this association.

The Correlation Coefficient, r

The correlation coefficient, r, developed by Karl Pearson in the early 1900s, is a numerical measure of the strength and direction of the linear association between the independent variable x and the dependent variable y.

The correlation coefficient can be calculated using the formula:

where n = the number of data points.

The formula for r is formidable, so I would not recommend doing this by hand, but technology can make quick work of the calculation.

If you suspect a linear relationship between x and y, then r can measure the strength of the linear relationship.

What the VALUE of r tells us:

• The value of r is always between –1 and +1 (i.e., –1 ≤ r ≤ 1).
• The size of the correlation r indicates the strength of the linear relationship between x and y. Values of r close to –1 or to +1 indicate a stronger linear relationship between x and y.
• If r = 0, there is likely no linear correlation. It is important to view the scatter plot, however, because data exhibiting a curved or horizontal pattern may have a correlation of 0.
• If r = 1, there is perfect positive correlation. If r = –1, there is perfect negative correlation. In both these cases, all of the original data points lie on a straight line. Of course, in the real world, this will not generally happen.

What the SIGN of r tells us:

• A positive value of r means that when x increases, y tends to increase, and when x decreases, y tends to decrease (positive correlation).
• A negative value of r means that when x increases, y tends to decrease, and when x decreases, y tends to increase (negative correlation).
• The sign of r is the same as the sign of the slope of the best-fit line (b).

Example

A random sample of 11 statistics students produced the following data, where x is the third exam score out of 80, and y is the final exam score out of 200.

Third exam score (x)	Final exam score (y)
65	175
67	133
71	185
71	163
66	126
75	198
67	153
70	163
71	159
69	151
69	159

Figure 3.13: Third and final exam scores data

 

 

 

 

A scatter plot showing the scores on the final exam based on scores from the third exam is shown below.

 

Find the correlation coefficient.

 

Solution

Using technology we would find the correlation coefficient is r = 0.6631.

Your Turn!

Match the following scatter plots with the three descriptions of correlation coefficients below them.

• –1 < r < 0
• r = 0
• 0 < r < 1

Solution

(a) 0 < r < 1, (b) –1 < r < 0, (c) r = 0

The Coefficient of Determination, r²

While the coefficient of determination (r²) is (obviously) the square of the correlation coefficient, it is usually stated as a percent rather than in decimal form. It has an interpretation in the context of the data:

• r², when expressed as a percent, represents the percent of variation in the dependent (predicted) variable y that can be explained by variation in the independent (explanatory) variable x using the regression (best-fit) line.
• 1 – r², when expressed as a percentage, represents the percent of variation in y that is NOT explained by variation in x using the regression line. This can be seen as the scattering of the observed data points about the regression line.

Figure References

Figure 3.14: Kindred Grey (2020). Third and final exam scores scatter plot. CC BY-SA 4.0. Adaptation of Figure 12.9 from OpenStax Introductory Statistics (2013) (CC BY 4.0). Retrieved from https://openstax.org/books/introductory-statistics/pages/12-3-the-regression-equation

Figure 3.15: Kindred Grey (2020). Matching scatter plots to correlation coefficients. CC BY-SA 4.0. Adaptation of Figure 12.13 from OpenStax Introductory Statistics (2013) (CC BY 4.0). Retrieved from https://openstax.org/books/introductory-statistics/pages/12-3-the-regression-equation

Figure Descriptions

Figure 3.14: Scatter plot of the data provided. The third exam score is plotted on the x-axis, and the final exam score is plotted on the y-axis. The points form a strong, positive, linear pattern.

Figure 3.15: Three scatter plots with lines of best fit. The first scatterplot shows points ascending from the lower left to the upper right. The line of best fit has positive slope. The second scatter plot shows points descending from the upper left to the lower right. The line of best fit has negative slope. The third scatter plot of points form a horizontal pattern. The line of best fit is a horizontal line.