BCom 1st Year Correlation Short Question Answer Notes

BCom 1st Year Correlation Short Question Answer Notes :-


Q.1. What do you mean by correlation? Why is it important?

Ans. Correlation is the relationship between two such variables in which the values of the other variables also change with the change in the values of one variable, i.e. there exists some causal connections between two series of groups of data.

‘If two or more quantities vary in sympathy so that movements in the one tend to be accompanied by the corresponding movements in the other, they are said to be correlated!

So, correlation is the statistical analysis that measures and analyses the degree to which two variables fluctuate with reference to each other. Correlation is important for the following purposes :

1. It helps in measuring the extent of relationship between two variables in one figure only. 

2. elationship between two or more variables enable us to predict more reliable forecasting . 

3. Such an analysis facilitates decision making in the business organisations. Expectations.

regarding the behaviour of variables are also based on correlation analysis. 

4. Correlation is also useful in making analysis, drawing of the conclusions and the development of hypothesis and theories in the field of research and investigation. 

5. Regression and ratio of variation concepts are also based on correlation that further help in estimating the value of one variable if the value of the other variable is given. 

Q.2. What are the different causes of correlation? Discuss its types. 

Ans. The different causes of correlation are : 

1. There is a direct relationship between the two variables. One of the variable is independent and has an influence on the other while the other is dependent and is influenced by the independent one. 

2. There may be a high degree of correlation between the variables but it may be difficult to pinpoint about the cause and effect. 

3. Correlation existing between two variables is due to their being related to some third common cause. 

4. The relationship between the two values of variables may be accidental without any influence either from external or internal factors which is considered as non-sense correlation. 

Correlation may be of the following three types on the basis of direction and ratio of the change een relevant variables and the number of series, etc. 

1. Positive and Negative correlation: Correlation is positive if two variables move together in same direction, i.e. when an increase or decrease in one variable corresponds to an increase or crease in the other and the correlation is negative if two variables move in opposite direction.

2. Linear and Curvi-linear Correlation: Such correlation is based upon the ratio of change between een two variables Correlation is linear if this ratio is uniform. But if the ratio of chan ariables is not uniform, correlation becomes non-linear or curvi-linear.

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