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A sample PMCC may suggest correlation, but is it significant in the population? A hypothesis test compares the sample r against a critical value to decide whether the population correlation ρ is zero.
What you'll be able to do
The population correlation coefficient is . The null hypothesis is (no correlation). The alternative is (two-tailed) or / (one-tailed).
Compare the sample with the critical value (from the table for the given significance level and sample size). If exceeds the critical value, reject — there is evidence of correlation.
Tip — For a two-tailed test at 5%, use the 2.5% critical value.
Formula recap
Common mistakes to avoid
Key takeaways
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