Calculations based on sample correlation coefficient

Sample correlation coefficient

The correlation coefficient of two variables in a data set equals to their covariance divided by the product of their individual standard deviations. It is a normalized measurement of how the two are linearly related.

The correlation r between two variables is:

\[r= \frac{1}{n-1}\sum \frac{\left (\left ( X_{i}-x \right ) \left ( Y_{i}-y \right )\right )}{s_{x}s_{y}} \]

where n is the number of observations in the sample, Σ is the summation symbol, xi is the x value for observation i, x is the sample mean of x, yi is the y value for observation i, y is the sample mean of y, sx is the sample standard deviation of x, and sy is the sample standard deviation of y.

for our calculation let the value of sx= a and sy=b  Xi=X and Yi= Y

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