Calculating correlation coefficients

Introduction to Python in Power BI

Jacob H. Marquez

Data Scientist

What is a correlation coefficient?

Definition: a numerical measure of some type of statistical relationship between two variables

Range: -1 to 1

Range

-1:

strong, negative relationship
increase in variable A is associated with a decrease in variable B

strong, positive relationship
increase in variable A is associated with an increase in variable B

0: no relationship

Correlation coefficient example #1

Scatter plot showing two variables with a correlation of 0.8.

Correlation coefficient example #2

Scatter plot showing two variables with a correlation of -0.8.

Correlation coefficient example #3

Scatter plot showing two variables with a correlation of 0.

Correlation matrix

A table with the variables of a dataset as rows and columns. The cells are the correlation coefficients between the two variables.

Correlation matrix

A table with the variables of a dataset as rows and columns. The cells are the correlation coefficients between the two variables. The row for Income is highlighted.

Correlation matrix

A table with the variables of a dataset as rows and columns. The cells are the correlation coefficients between the two variables. The correlation for Income vs. MntWines is highlighted.

Correlation heatmap

import seaborn as sns

corrMatrix = dataset.corr()

sns.heatmap(
    corrMatrix, 
    annot=True
    )

Example of a heatmap

Correlation heatmap example

Example of a heatmap

Correlation heatmap example

Example of a heatmap

Correlation does not mean causation

Strong correlative relationship <> One caused the other
Causal relationship typically requires experimentation

Rock music quality vs US oil production

Let's practice!

Introduction to Python in Power BI