Running head: Correlation Analysis - Target Stores 1

Correlation Analysis - Target Stores

Hal Hagood

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Conduct a Correlation Analysis to Produce a Scatterplot Diagram That

Shows the Relationship between Two Variables and Supporting Examples

For this correlation analysis, we produced scatterplots for the relationships between various race

groups and markets where Target Stores are located. Namely showing the relationship between Asian,

Hispanic and African American customers in various cities. The final scatterplot shows the relationship

between Year to Date Annualized Sales and various Target Store locations
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Describes the Results of a Correlation Analysis and Provides Supporting

Examples of How the Data Supports the Answer to the Business Question

Target is similar to several commercial stores, using its own internal data and publicly available

data to a competitive advantage. In terms of publicly available data, one source Target uses is census

data. We can see from the first scatterplot, African American and Market Name that the three most

prevalent markets are Charleston, New haven Milford and Waco respectively. For Hispanics Little

Rock, Miami Fort Lauderdale-Miami Beach and San Francisco. Interestingly Little Rock, MiamiFort

Lauderdale- Miami Beach and San Francisco also seem to be the most prevalent for the Asian

community as well. The final Scatterplot show that YTD Sales are highest in Chico, Little Rock and New

Haven-Milford.

Correlation is a term that refers to the strength of a relationship between two variables. A

strong, or high, correlation means that two or more variables have a strong relationship with each other,

while a weak or low correlation means that the variables are hardly related. Correlation analysis is the

process of studying the strength of that relationship with available statistical data

The most widely used type of correlation coefficient is the Pearson r. This analysis assumes that

the two variables being analyzed are measured on at least interval scales, meaning they are measured

on a range of increasing value. The coefficient is calculated by taking the covariance of the two variables

and dividing it by the product of their standard deviations.

Correlation coefficients can range from -1.00 to +1.00. The value of -1.00 represents a perfect

negative correlation, which means that as the value of one variable increases, the other decreases.

While a value of +1.00 represents a perfect positive relationship, meaning that as one variable increases

in value, so does the other. Values like these--of + or - 1.00--signal a perfectly linear relationship
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between the two variables, so that if you plot the results on a graph it would make a straight line. A

value of 0.00 means that there is no relationship between the variables being tested. (Sociology, 2017).
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Reference

Sociology, (2017). Understanding Correlation Analysis. Retrieved January 26, 2017 from

http://sociology.about.com/od/Statistics/a/Correlation-Analysis.htm