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Correlation Coefficient Formula
If the two variables are related positively, we have observed that if the score on
one variable is above the mean, then the score on the other variable will also tend to
be above the mean. Earlier in Chapter 6, we learned about z-scores. A z-score tells us
how far above (or below) the mean a score is in standardized units. Thus, in a positive
relationship, the z-scores for the two variables should tend to agree; in particular, they
both should be positive. In the scatterplot
below, the two z-scores (in red, one for the horizontal variable and one for the vertical variable) are
displayed for each point when you move your mouse near the point. Observe
how the z-scores do or do not agree for a point for different values of the correlation
coefficient. The green numbers count the number of points in each quadrant defined by the
means.
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Be sure to do the Discover suggestions and questions before reading on. You will
have discovered that
- when the z-scores agree, the correlation coefficient is near 1,
- when the z-scores agree, but with opposite signs, the correlation coefficient is near
-1, and
- when the z-scores disagree, the correlation coefficient is near 0.
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