Question
Write down the steps involved in calculating correlation co-efficient by step deviation method.
Solution
Steps involved in calculating correlation Co- efficient by step - deviation:
1. Take the assumed mean of X series.
2. Take the assumed mean of Y series.
3. Calculate deviations of X and Y from assumed mean and name them dX and dY respectively.
4. Divide dX and dY by convenient common factor to reduce the calculations. This is also called change of origin and change of scale of the values of X and Y. The value of co- efficient of correlation is unaffected by the change in origin and change of scale if X and Y. After changing the deviations we apply the same formula of assumed mean method.
