What is correlation analysis?

Correlation analysis is a statistical method used to examine the relationship between two or more variables. It measures the degree of association or the strength of the relationship between variables. Correlation analysis provides insights into the direction (positive or negative) and magnitude of the relationship, indicating whether the variables move together or in opposite directions. By calculating the correlation coefficient, which ranges from -1 to +1, correlation analysis quantifies the strength of the relationship. A coefficient close to +1 indicates a strong positive correlation, while a coefficient close to -1 suggests a strong negative correlation. A coefficient close to zero indicates a weak or no correlation. Correlation analysis serves as a valuable tool in various fields, including finance, social sciences, economics, and market research, to identify patterns and make informed decisions based on the relationship between variables.

This mind map was published on 24 September 2023 and has been viewed 124 times.