Properties of Correlation | Two-Variable Data
In this video, I go over some common properties of correlation with the aid of Microsoft Excel. The properties I highlight are:
1. How correlation does not change when you reverse the roles of your explanatory and response variables.
2. How correlation weakens (becomes closer to 0) when an outlier that does not follow the linear trend is added.
3. How correlation strengthens (becomes closer to 1 or -1) when an outlier is added that extends the linear trend.
4. How correlation does not change when we apply simple linear transformations (i.e. unit conversions) to one of our variables.