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Math Help - Correlation

  1. #1
    Newbie
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    Correlation

    Hi folks
    I was wondering if someone could please check this correlation task and see if I have done it correctly. The correlation is between age and salary. Many thanks.
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  2. #2
    MHF Contributor
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    Re: Correlation

    Hey Andrew187.

    Your answer is correct if the calculations are correct, but in terms of your answer, you should calculate the real correlation from your mean outputs where corr(x,y) = cov(x,y)/SQRT(var(x)var(y)). Since your cov(x,y) > 0 you do have positive correlation (since 789 > 34*11).

    Use the formula Var[X] = E[x^2] - E[x]^2 and cov(x,y) = E[xy] - E[x]e[y]
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