Critical Values Of The Pearson Correlation Coefficient R. Level of significance a for one tailedtest. Identify the sampling distribution and test statistic identify critical region Find the critical value of t with df N -2.
This indicates that r is significant. Df n-2 df n2 and then a critical t-value for the given significance level. If the value is near.
R r is tested using the following t-statistic.
The correlation coefficient r 09544 is much greater than r Critical 07545. The calculation of the Pearson coefficient is as follows r 51935-26637 514298- 2662 5283- 37205 -09088 Therefore the Pearson correlation coefficient between the two stocks is -09088. The sample size should be moderate 20-30 for good estimation. For a given sample size.
