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CA Foundation · Quantitative Aptitude · Correlation and Regression

Which of the following is a genuine limitation of the scatter diagram method compared with Karl Pearson's coefficient?

Its limitation is that it gives only a rough, visual idea of the nature and degree of correlation without an exact numerical value. It does show direction and works on paired data, but precise measurement needs Karl Pearson's coefficient.

  1. AIt cannot show the direction of correlation
  2. BIt cannot be used for paired data
  3. CIt gives only a rough idea of the nature and degree of correlation and no exact numerical valueCorrect
  4. DIt can be used only when the relationship is perfectly linear

Explanation

A scatter diagram shows direction and approximate strength visually, and works for paired data with any pattern. Its limitation is that it gives no precise numerical measure of the degree of correlation, unlike Pearson's r.

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