When measuring the correlation of categorical data, you typically use metrics that are suitable for categorical variables. One commonly used metric for this purpose is Cramér’s V.
Cramér’s V is a measure of association between two nominal variables and is an extension of the chi-square test. It ranges from 0 to 1, with 0 indicating no association and 1 indicating a perfect association. The formula for Cramér’s V is:
V=n×min(k−1,r−1)χ2
Where:
- χ2 is the chi-square statistic from the contingency table,
- n is the total number of observations,
- k is the number of categories in one variable, and
- r is the number of categories in the other variable.
Cramér’s V is commonly used when dealing with categorical variables, providing a measure of the strength and direction of association between them.