CONCURRENT DEVIATION METHOD

The method of studying correlation is the simplest of all the methods. The only thing that is required under this method is to find out the direction of change of X variable and Y variable.
The formula applicable is:
                
^{r_c = +_{√+ (2C-n)/n}}
Where rc stands for coefficient of correlation by the concurrent deviation method; C stands for
the number of concurrent deviations or the number of positive signs obtained after multiplying
Dx with Dy

n = Number of pairs of observations compared.


Steps.

 (i) find out the direction of change of X variable, i.e., as compared with the first value, whether the second value is increasing or decreasing or is constant. If it is increasing put (+) sign; if it is decreasing put (-) sign (minus) and if it is constant put zero. Similarly, as compared to second  value find out whether the third value is increasing, decreasing or constant. Repeat the same process for other values. Denote this column by D_x.

(ii) In the same manner as discussed above find out the direction of change of Y variable and denote this column by D_y.

(iii) Multiply D_x with D_y, and determine the value of c, i.e., the number of positive signs.

(iv) Apply the above formula,  i.e.,

^{r_c = +_{√+ (2C-n)/n}}

Note. The significance of + signs, both ( inside the under root  and outside the under root ) is that we cannot take the under root of minus sign. Therefore, if 2C - n   is negative, this negative   
                                                                                         n
value of multiplied with the minus sign inside would make it positive and we can take the under root. But the ultimate result would be negative. If  2C-n  is positive then, of course, we get a positive
                                                                     n
value of the coefficient of correlation.

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