Difference Between Correlation And Regression

Forecasting

Relative

absolute

As mentioned earlier, Correlation and Regression are the principal units to be studied while
preparing for the 12th Board examinations. Also, it is an important factor for students to be well
aware of the differences between correlation and regression. Below mentioned are a few key
differences between these two aspects.

Correlation Regression
‘Correlation’ as the name says it determines the ‘Regression’ explains how an independent
interconnection or a co-relationship between the variable is numerically associated with the
variables. dependent variable.
In Correlation, both the independent and However, in Regression, both the dependent
dependent values have no difference. and independent variable are different.
The primary objective of Correlation is, to find When it comes to regression, its primary intent
out a quantitative/numerical value expressing is, to reckon the values of a haphazard variable
the association between the values. based on the values of the fixed variable.
However, regression specifies the effect of the
Correlation stipulates the degree to which both
change in the unit, in the known variable(p) on
of the variables can move together.
the evaluated variable (q).
Correlation helps to constitute the connection Regression helps in estimating a variable’s
between the two variables. value based on another given value.
The comparison between correlation and regression can be studied through a tabular
format as given below:

Basis of Correlation Regression

Difference

Meaning Correlation refers to a statistical

measure that determines the Regression depicts how an independent
association or co-relationship variable serves to be numerically related to
between two variables. any dependent variable.

Utility Used for representing the linear It is used for fitting the best line and
relationship existing between two estimating the value of one variable based
variables. on its relationship with the other.

Dependent There is no difference between the Both variables serve to be different in

/Independent two. Both variables are mutually terms of regression analysis. One variable
variables dependent. is independent, while the other is
dependent.

Indicator of It indicates the extent and way in Regression depicts the impact of any unit
which two variables make their change in the value of the known variable
movements together. (x) on the value of the estimated variable
(y).

Objective To find the numerical value that To estimate the values of random variables
defines and shows the based on the values shown by fixed
Basis of Correlation Regression
Difference

relationship between variables. variables.

Purpose The primary purpose is to predict The primary purpose is to predict/

the most dependable forecasts. estimate the value of any unknown
variable by taking the help of the known
variable.

Scope Correlation analysis offers limited Regression analysis provides a broader

applications. scope of applications.

Range Coefficients may range from -1.00 If byx > 1, then bxy < 1 in regression
to +1.00. analysis.

Responding The correlation coefficient serves The regression coefficient shows

Nature to be independent of any change dependency on the change of Scale but is
of Scale or shift in Origin. independent of its shift in Origin.

Nature of The correlation coefficient is Regression coefficient fails to be

Coefficient mutual and symmetrical. symmetrical.

Exceptional Non-sense correlation may find a Non-sense regression is non-existent in

Cases place in some correlation regression analysis.
analyses.

Mathematical Not very useful for advanced It is widely used for advanced
treatment. mathematical treatment. mathematical treatment.

Measures This type of analysis measures the It depicts the fundamental level as well as
degree/extent to which any two the nature of existing linear relationships
variables make their movements between two variables. Regression
Basis of Correlation Regression
Difference

in unison. describes one variable in the form of a

linear function of the other variable.

Relationship It is confined to the linear It encompasses both linear as well as non-

relationships existing between linear relationships. The cause and effect
variables only. Correlation does relationship between the two is indicated,
not depict the cause of the effect of and a functional link is established.
the variables.

Variables Both variables x and y are random In regression, x is a random variable while
variables. y is a fixed variable. At times, both
variables may be like random variables.

Coefficient The coefficient correlation The regression coefficient is generally an

serves to be a relative measure. absolute figure.

Definition of Correlation

Correlation is described as the analysis that informs users about the association or the absence of
any relationship between any two variables ‘x’ and ‘y.’ The word correlation combines ‘Co’
(together) and relation (interaction/connection) in context to any two quantities. Correlation
between two given variables exists when a unit change in any one variable gains a retaliation (in
response) in the form of an equivalent change in the other variable. The answer can be either direct
or indirect. Conversely, the two variables are said to be uncorrelated in case the movement in any
one variable fails to generate any flow in the other variable, be it directly or indirectly. Correlation
is, therefore, a statistical technique representing the strength of the connection between any given
pairs of variables.

Given below are the measures of correlation:

  The correlation coefficient of Karl Pearson’s Product-moment
 Scatter diagram
 Coefficient of concurrent deviations
 Coefficient of Spearman’s rank correlation

Types of Correlation

The three types of relationship to their nature are:

1. Positive Correlation: When two variables are seen moving in the same direction, wherein an
increase in the value of one variable results in an increase in other, and vice versa, then they are
said to be positively correlated, e.g., profit and investment.

2. Negative Correlation: On the other hand, when two variables are seen moving in different
directions, and in a manner that any increase in one variable results in a decrease in value of the
other, and vice versa, then the variables are said to be negatively correlated; e.g., price and demand
of any product.

3. Zero Correlation: If any given change in a variable is not dependent on the other, then the
variables are said to have Zero Correlation, e.g., marks and height of students in a class.

Correlation can be either positive or negative.

Definition of Regression

Regression analysis is useful for predicting the value of a dependent variable based on the known
value of any independent variable. It is assumed that an average mathematical relationship exists
between the two variables. Regression refers to the statistical technique for assessing the changes
occurring in the metric dependent -variable caused due to the transition occurring in one/more
independent variables. The incurring analysis is based on the average mathematical relationship
existing between the two/more variables. Regression is known to play an essential role in terms of
several human activities. Overall, it serves to be a powerful and flexible instrument in the hands of
analysts. Regression is used for forecasting any event based on past or present events; e.g., a
business’s annual profit may be ascertained based on records with the help of regression.

There exist two variables x and y in any simple linear regression. Herein, y depends on x, or in other
words. It is influenced by x. While x is referred to as the predictor or independent variable, y is
termed as the criterion or dependent variable.

Types of Regression

Based on their functionality, the different types of regression are as follows:

1.Simple linear Regression: It is a statistical method used for summarizing and studying the
relationships between any two continuous variables – an independent variable and a dependent
variable.

2. Multiple Linear Regression: This type of regression examines the linear relationship existing
between a dependent variable and more than one independent variable.

Conclusion:

The difference between correlation and regression, the two crucial mathematical concepts, cannot
be studied independently of each other. Correlation analysis is best used when a researcher has to
assess whether the variables under study are directly/ indirectly correlated or not. In case they are
correlated, then this type of analysis showcases the strength of their association. The most popular
measure of correlation is Pearson’s correlation coefficient.

In regression analysis, it is possible to establish a functional relationship between any pair of given
variables with the intent of making future projections concerning events.