Correlation Analysis Notes For MBA 1st Year Semester Long Question Answer Notes

**Differences between Correlation and Regression**

S.No. |
Basis of difference |
Correlation |
Regression |

1. | Relationship | Correlation is the relationship between two or more variables, which vary in sympathy with the other in the same or the opposite direction. | Regression means going back and it is a mathematical measure showing the average relationship between two |

2. | Types of variables | Both the variables X and Y are random variables. | Here, X is a random variable and Y is a fixed variable. Sometimes, both the variables may be random variables. |

3. | It finds out the degree of relationship between two variables and not the cause-effect of the variable. | It indicates the cause and effect relationship between variables and establishes a functional relationship. | |

4. | It is used for testing and verifying the relation between two variables and gives limited information. | Besides verification, it is used for the prediction of one value, in relationship to the other given value. | |

5. | The coefficient of correlation is a relative measure. The range of relationships lies between 1. | The regression coefficient is an absolute figure. If we know the value of the independent variable, we can find the value of the dependent variable. | |

6. | There may be a non-sense correlation between the two variables. | In regression, there is no such non-sense regression. | |

7. | It has limited application because it is confined only \to a linear relationship between the variables. | It has wider application, as it studies the linear and non-linear relationships between the variables. |

Pages: 1 2