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“Correlation is not causation” is a popular and a more commonly overlooked mantra in statistics.
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This indicates that there is a causal relationship between the two events, event A being the cause and event B being the effect of event A or vice versa. Causation means that one event has caused another, or that one event happens as the result of the other event. The significance of the correlation coefficient values is highly contextual, based on who is carrying out the analysis and for what purpose So the Causation:Īnother concept that is tightly coupled with correlation is the causation. The correlation statistics and their visual representations (the scatterplots) are widely used in many practical applications, not only by analysts or statisticians, but by everyone to identify trends, to predict the value of one based on the other, to tell compelling narratives and sometimes even to draw conclusions. The value of 0, indicates that there is no linear relationship between the two, and that we cannot establish a relation between the two, by considering the increase or decrease in their values. The values of 1 and -1 indicate a perfect positive and a perfect negative correlation. On the same lines, a negative correlation coefficient means that, say, the value of A increases with the decrease in the value of B. The positive values of the correlation coefficient indicates that the value of A increases with the increase in the value of B. So this number describes the relative change in A, with respect to the change in B. We will call the two events/things to be A and B. It measures the strength based on the well-known and every one’s favourite ‘linear relationship’ between the two variables in consideration. There are a number of types of correlation coefficients and the most commonly used one and an easily interpretable one is the Pearson correlation coefficient. Statisticians and analysts use a measure called the correlation coefficient, to measure the strength of the relationship between two relative things. In statistics, correlation generally implies the measure of how related the two things or events are, it essentially measures the degree of the relationship between the two. So, the Correlation:Ĭorrelation in general terms is set to imply a relationship, a connection or an association between two things or two events. Each individual has a distinct and a unique perception and reflection towards the world. We are destined to naturally look for patterns in our day to day life events and we like to connect the dots, relate one event to another (correlate), to tell a compelling story that is strongly persuasive and cohesive, about what we think is happening, which in some cases could be drastically different to what is actually happening.