Scatter diagram - correlation analysis, Applied Statistics

Assignment Help:

Scatter Diagram

The first step in correlation analysis is to visualize the relationship. For each unit of observation in correlation analysis there is a pair of numerical values. One is considered the independent variable; the other is considered dependent upon it and is called the dependent variable. One of the easiest ways of studying the correlation between the two variables is with the help of a scatter diagram.

A scatter diagram can give us two types of information. Visually, we can look for patterns that indicate whether the variables are related. Then, if the variables are related, we can see what kind of line, or estimating equation, describes this relationship.

The scatter diagram gives an indication of the nature of the potential relationship between the variables.

Example 

A sample of 10 employees of the Universal Computer Corporation was examined to relate the employees' score on an aptitude test taken at the beginning of their employment and their monthly sales volume. The Universal Computer Corporation wishes to estimate the nature of the relationship between these two variables

Aptitude Test Score

Monthly Sales (Thousands of Rupees)

Aptitude Test Score

Monthly Sales (Thousands of Rupees)

X

Y

X

Y

50

30

70

60

50

35

70

45

60

40

80

55

60

50

80

50

70

55

90

65

To determine the nature of the relationship for example, we initially draw a graph to observe the data points.

Figure 1

2406_scatter diagram.png

On the vertical axis, we plot the dependent variable monthly sales. On the horizontal axis we plot the independent variable aptitude test score. This visual display is called a scatter diagram.

In the figure given above, we see that larger monthly sales are associated with larger test scores. If we wish, we can draw a straight line through the points plotted in the figure. This hypothetical line enables us to further describe the relationship. A line that slopes upward to the right indicates that a direct, or a positive relation is present between the two variables. In the figure given above we see that this upward-sloping line appears to approximate the relationship being studied.

The figures below show additional relations that may exist between two variables. In figure 2(a), the nature of the relationship is linear. In this case, the line slopes downward. Thus, smaller values of Y are associated with larger values of X. This relation is called an inverse (linear) relation.

Figure 2

705_scatter diagram1.png

 

Figure 2(b) represents a relationship that is not linear. The nature of the relationship is better represented by a curve than by a straight line - that is, it is a curvilinear relation. The relationship is inverse since smaller values of Y are associated with larger values of X.

Figure 2(c) is another curvilinear relation. In this case, however, larger values of Y are associated with larger values of X. Hence, the relation is direct and curvilinear.

In figure 2(d), there is no relation between X and Y. We can draw neither a straight line nor a curve that adequately describes the data. The two variables are not associated.


Related Discussions:- Scatter diagram - correlation analysis

Types of sampling, Given a certain population there are various ways in whi...

Given a certain population there are various ways in which a sample may be drawn from it. The chart below illustrates this point: Figure 1 In  Judgem

Expected utility maximizer, The investor has constant wealth 1 and is o?ere...

The investor has constant wealth 1 and is o?ered to invest in shares of a project that either gains 3=2 or loses 1 with equal probabilities. Therefore, if the investor obtains sha

Ogive percentile, how do i determine the 40th percentile in an ogive graph

how do i determine the 40th percentile in an ogive graph

Calculate the seasonal indexes , The total number of overtime hours (in 100...

The total number of overtime hours (in 1000s) worked in a large steel mill was recorded for 16 quarters, as shown below. Year Quarter Overtime hour

Discriminant analysis, Discriminant analysis (DA) helps to determine which ...

Discriminant analysis (DA) helps to determine which variables discriminate between two or more naturally occurring groups. Mathematically equivalent to MANOVA, it ' is extensively

Job application, .what job can you after offering that course

.what job can you after offering that course

Admissibility, Admissibility A very common concept which is applicable ...

Admissibility A very common concept which is applicable to any procedure of the statistical inference. The underlying notion is that the procedure/method is admissible if and o

Simple linear regression, Simple Linear Regression   While correlati...

Simple Linear Regression   While correlation analysis determines the degree to which the variables are related, regression analysis develops the relationship between the var

Transformation of data, PCA is a linear transformation that transforms the ...

PCA is a linear transformation that transforms the data to a new coordinate system such that the greatest variance by any projection of the data comes to lie on the first coordinat

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd