Question

Give an example of two variables that are correlated in a strong and positive direction and two that are correlated in a strong a negative direction. Comment on any other factors that could influence their relationship and what can an cannot be inferred from these correlations.

Answer 1

Strong positive correlation :

Example : Ice cream sales in dollars, daily high temperatures. As temperature increases and weather becomes hotter, people tend to purchase more and more ice creams.

Other factor : Marketing of ice cream can also influence the above relationship.

Strong negative correlation :

Example : The weight of a car and miles per gallon. Cars that are heavier tend to get less miles per gallon of gas.

Other factor : Horsepower of car can also influence the above relationship

Correlation only indicates the strength of association between variables. It does not reflect the impact of the unit change in one variable on the other variable.