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CA Foundation · Quantitative Aptitude · Correlation and Regression

In the concurrent deviation method of finding correlation, what does a 'concurrent deviation' of a pair of observations indicate?

A concurrent deviation arises when both series change in the same direction relative to the previous observation, so the product of their direction signs is positive. The method counts such pairs (c) and uses them, not actual magnitudes, to estimate correlation.

  1. AThe two series move in the same direction from the previous observation, giving a positive sign for dx·dyCorrect
  2. BThe difference between the two actual values of x and y
  3. CThe difference between each value and the arithmetic mean of its series
  4. DThe difference between the ranks assigned to x and y

Explanation

In this method, the direction of change (+ or –) of each value from the preceding value is noted for both series. When the product of the two signs is positive, i.e. both rise or both fall, the pair is a concurrent deviation. The other options describe rank or mean-deviation methods.

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