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Assumption College of Nabunturan: P-1 Poblacion Nabunturan, Compostela Valley 8800 Email

The document contains examples of correlation analysis between different variables. It provides 12 examples measuring the correlation between: 1) Number of passengers on commercial flights and flight costs. A positive correlation of 0.579 was found. 2) Sales and advertising spending for 8 companies. A very high positive correlation of 0.948 was found. 3) Bond interest rates and prime interest rates for 5 observations. A very high negative correlation of -0.828 was found.

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274 views7 pages

Assumption College of Nabunturan: P-1 Poblacion Nabunturan, Compostela Valley 8800 Email

The document contains examples of correlation analysis between different variables. It provides 12 examples measuring the correlation between: 1) Number of passengers on commercial flights and flight costs. A positive correlation of 0.579 was found. 2) Sales and advertising spending for 8 companies. A very high positive correlation of 0.948 was found. 3) Bond interest rates and prime interest rates for 5 observations. A very high negative correlation of -0.828 was found.

Uploaded by

Jemuel Luminarias
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ASSUMPTION COLLEGE OF NABUNTURAN

P-1 Poblacion Nabunturan, Compostela Valley 8800


Email: acn.excelsior@yahoo.com
Mobile Number: (+63) 907-223-8085

NAME: SHIELA MAE V. OSMAN


EDUC 102
PROF. DELFIN J. ENARGAN

EXERCISE 10

For the following variables, what would you expect the correlation coefficient to
be positive, negative, or zero?

ZERO a. A person’s total family income and his neighbor’s total family income.
POSITIVE b. Number of registered voters in a town and the number voting on election day.
NEGATIVE c. Number of cigarettes smoked and lung function
POSITIVE d. Calories consumed and weight
NEGATIVE e. Altitude and mean temperature
POSITIVE f. Gross national product and infant mortality rate
ZERO g. Population growth rate of a country and life expectancy of its people
POSITIVE h. Number of cars in a household and total family income
POSITIVE i. Number of hours you study and your grade on an exam
ZERO j. Size of the head and intelligence test scores
POSITIVE k. Educational Attainment and income
EXERCISE 11

1. The flight and associated number of passengers for 12 five-hundred-mile


commercial airline flights using Boeing 737’s during the season of the year.

Number of 61 63 67 69 70 74 76 81 86 91 95 97
Passengers

Costs ($1000) -4.28 4.08 4.42 4.17 4.48 4.30 4.82 4.70 5.11 5.13 5.64 5.56

Cases Passengers Costs X^2 Y^2 xy


(X) (Y)
1 61 4.28 3721 18.3184 261.08
2 63 4.08 3969 16.6464 257.04
3 67 4.42 4489 19.5364 296.14
4 69 4.17 4761 17.3889 287.73
5 70 4.48 4900 20.0704 313.60
6 74 4.30 5476 18.4900 318.20
7 76 4.82 5776 23.2324 366.32
8 81 4.70 6561 22.0900 380.70
9 86 5.11 7396 26.1121 439.46
10 91 5.13 8281 26.3169 466.83
11 95 5.64 9025 31.8096 535.80
12 97 5.56 9409 30.9136 539.32
N=12 Σx=930 Σy=56.69 Σ x 2=73,764 ΣY 2=270.9251 ΣXY =4462.22
Mean=77.5 Mean= 4.72
Pearson’s Correlation
Variable Passengers Costs

1. Passengers Pearson’s r -
p-value -
2.Costs Pearson’s r 0.579 -
p-value 0.049 -

( Σ x )(Σ y )
bxy =Σ XY
N
_____________
(Σ x2 )
2
Σx -
N

(930)(56.69)
bxy =4462.22
12
_____________
73764 -¿ ¿ ¿

4462.22−4393.475
bxy =
73764−72705

bxy =68.245
1689
bxy =0.04

a xy= Ý −b yx X́

a xy=4.81−0.05(78)
a xy=4.81−3.9a xy=0.91
a xy=0.9

Y^ =bx+a
Y^ =0.05 =0.05+0.9 r

Analysis:
The computed p= 0.04 indicates a “very low” positive correlation between the costs
and associated number of passengers of 12-hudred mile commercial airline flights
using BOEING 737’s during the season of the year.
The independent variable which is the number of passengers was increasing during the
season of the year while the costs per ($1000) also increases. The data in the scatter
plot shows a linear positive relationship which shows moderately strong as the points
were not close or tightly plotted to each other.
This suggest that number of passengers goes up, and then the number of costs ($1000)
also goes up. It implies a positive correlation.

2. A corporation owns a several part companies. The strategic planner for the
corporation believes dollar spent on advertising can to some extent be a predictor
pf total sales dollar. She gathers the following sales and advertising information in
million dollars.
Advertising 12.75 3.7 21.6 60.0 37.6 6.1 16.8 41.2
Sales 148 55 338 994 541 89 126 379

Cases Advertising Sales x^2 y^2 XY


1 12.5 148 156.25 21,904 1,850
2 3.7 55 13.69 3,025 203.5
3 21.6 338 466.56 114,244 7,300.8
4 60.0 994 3600 988,036 59,640
5 37.6 541 1413.76 292,681 20,341.60
6 6.1 89 37.21 7,921 542.9
7 16.8 126 282.24 15,876 2,116.80
8 41.2 379 1697.44 143,641 15,614.8
N=8 N=199.5 N=2670 7667.15 1,587,328 107,610.40
´
x=29.94 x=2´22.5

Pearson’s Correlation
Variable Passengers Costs

1. Advertising Pearson’s r -
p-value -
2.Sales Pearson’s r 0.948 -
p-value < .001 -
S 6 Σ d2 Df =N−2
r =1− ¿
n¿ ¿
Df =8−2
Df =6
S 6 (2)
r =1− ¿
8 ¿¿
Sr =0.98

T Value
r s √ n−2
t=
√ 1−r s2
0.98 √8−2
t=
√1−(0.98)2
t=−7.4

T value Critical Value


7.4 < 2.447
Analysis:
There is no significant relationship between the sales and advertising.
The degree of relationship is very high correlated or very dependable
relationship between the total sales and advertising.

3. Investment analysis generally believe the interest rate on bonds is inversely


related to prime interest for loans. Can the bond rate be predicted by the prime
interest rates?

Bond rate 5% 12% 9% 15% 7%


Prime interest rates 16% 6% 8% 4% 7%

Cases Bond rate(X) Prime Interest RX RY D D2


Rate
1 5% 16% 5 1 4
2 12% 6% 2 4 -2
3 9% 8% 3 2 1
4 15% 4% 1 5 -4
5 7% 7% 4 3 1
N=5 48 41 ΣD=0 Σ D 2=38
Mean=9.6 Mean=8.2

Pearson’s Correlation
Variable Passengers Costs

1. Bond rate Pearson’s r -


p-value -
2.Prime rate Pearson’s r -0.828 -
p-value 0.084 -

1−6 Σ D 2
P=
n¿¿
1−228
P=
120
P=1−1.19
P=−.90Very high negative correlation

Interpretation: The analysis revealed that the Prime Interest rate has a significant
negative relationship with Bond rate(r=-.90) and the Prime Interest Rate.
The degree of relationship is very high correlated or very dependable relationship
between the total sales and advertising.

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