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

Probability, 2.1 Modern hotels and certain establishments make use of an el...

2.1 Modern hotels and certain establishments make use of an electronic door lock system. To open a door an electronic card is inserted into a slot. A green light indicates that the

Index number, "index number is an economic barometer" comment on this state...

"index number is an economic barometer" comment on this statement

Philosophy, what is the aim of statistics?

what is the aim of statistics?

Find probability of remaining paint free - ball duel, In a three-cornered p...

In a three-cornered paint ball duel, A, B, and C successively take shots at each other until only one of them remains paint free. Once hit, a player is out of the game and gets no

Measurement errors models, How can we analyse data with four bilateral resp...

How can we analyse data with four bilateral response variables measured with errors and three covariated measured without errors?

Data reduction, The PCA is amongst the oldest of the multivariate statistic...

The PCA is amongst the oldest of the multivariate statistical methods of data reduction. It is a technique for simplifying a dataset, by reducing multidimensional datasets to lower

Probability, In 120 tosses of a coin, 45 heads and 75 tails are observed. ...

In 120 tosses of a coin, 45 heads and 75 tails are observed. Is this a balanced coin? Use a=0.05. (Follow the basic steps of hypothesis testing)

business forecasting, Explain the characteristics of business forecasting

Explain the characteristics of business forecasting.

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