The Limitation of Pearson Correlation While Using It With Ordinal Categorical Data

Imagine you have an ordinal categorical feature. You want to measure its correlation with other continuous features.

Before proceeding with the correlation analysis, you will encode the feature, which is a fair thing to do.

Yet, unknown to many, the choice of encoding can largely affect the correlation results.

For instance, consider the dataset below:

Here, we have:

• An ordinal categorical feature: t-shirt size (S, M, L, XL).

• A continuous feature: weight.

Intuitively, there must be a monotonic relationship between the two features.

However, as depicted below, altering the categorical encoding affects the Pearson correlation.

Spearman correlation is a better alternative to assess the monotonicity between ordinal and continuous features.

It always remains the same, irrespective of the choice of categorical encoding. This is because the Spearman correlation is rank-based.

It operates on the ranks of the data, which makes it more suitable for such cases of correlation analysis.

👉 Over to you: What are some other measures to determine the correlation between categorical data and continuous data?

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