Statistics for Big Data For Dummies
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Measures of association quantify the strength and the direction of the relationship between two data sets. Here are the two most commonly used measures of association:

  • Covariance

  • Correlation

Both measures are used to show how closely two data sets are related to each other. The main difference between them is the units in which they are measured. The correlation measure is defined to assume values between –1 and 1, which makes interpretation very easy.


The covariance between two samples is computed as follows:


The covariance between two populations is computed as follows:



The correlation between two samples is computed like this:


The correlation between two populations is computed like this:


About This Article

This article is from the book:

About the book authors:

Alan Anderson, PhD, is a professor of economics and finance at Fordham University and New York University. He's a veteran economist, risk manager, and fixed income analyst.

David Semmelroth is an experienced data analyst, trainer, and statistics instructor who consults on customer databases and database marketing.

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