Академический Документы
Профессиональный Документы
Культура Документы
Types of Relations:
1.Positive / Negative / Zero
2. Linear / Non Linear
3. Simple / Multiple / Partial
Methods of measures of
Relationships:
1. Scatter Diagram
2. Karl. Pearsons coefficient Of
Correlation
3. Rank Correlation
Ex: An instructor is interested in finding out how
the number of students on a given day is related
to the temperature of that day. A random sample
of 10 days was used for the study indicate the
number of students absent and the temperature
for each day.
Draw a Scatter Diagram of these data.
No.of
Absentees
8 7 5 4 2 3 5 6 8 9
Temperature
10 20 25 30 40 45 50 55 59 60
No.of Absentees
0
1
2
3
4
5
6
7
8
9
10
0 20 40 60 80
Temp
N
o
.
o
f
A
b
s
e
n
t
e
e
s
No.of Absentees
Karl .Pearsons Coefficient of Correlations is given by,
) )
) )
) )
) )
'
+
'
'
+
'
'
+
'
'
+
'
'
+
'
'
+
'
'
+
'
'
+
'
=
2
2
2
2
2
2
2
2
2 2
) , (
1 1 1 1
1 1 1
) , (
1 1
1
) , (
y y n x x n
y x xy n
y x r
y
n
y
n
x
n
x
n
y
n
x
n
xy
n
y x r
y y
n
x x
n
y y x x
n
y x r
Ex: Pepsi Cola is studying the effect of
its last advertising campaign. People
chosen at random were called and
asked how many cans of Pepsi Cola
had bought (X) in the past week and
how many advertisements (Y) they
had either read or seen in the past
week.
X :3 7 4 2 0 4 1 2
Y :11 18 9 4 7 6 3 8
Calculate the coefficient of Correlation
and coefficient of determination.
Spearman's Rank Correlation is given by
)
ns observatio of pair of no. is
R R d Where
) 1 (
6
1 ,
y x
2
2
n
n n
d
y x
=
+
=
n n
d
y x
A financial analyst wanted to find out whether inventory
turnover influences any companys earnings per share
(in %).A random sample of 7 companies listed in a stock
exchange were selected and the following data was
obtained for each.
Company Inventory turnover Earnings per
(No.of times) share(%)
A 4 11
B 5 9
C 7 13
D 8 7
E 6 13
F 3 8
G 5 8
Find the strength of association between inventory
turnover and earnings per share. Interpret the result.