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Final Exam Guidelines-1

1. The document discusses key concepts related to correlation and regression analysis including correlation coefficient, regression coefficient, and the differences between the two. 2. It also defines core probability concepts such as random experiments, sample space, events, conditional probability, classical probability, and axiomatic probability. 3. Additionally, it covers topics like random variables and mathematical expectation as well as provides examples and properties for many of these statistical and probability terms.

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22 views

Final Exam Guidelines-1

1. The document discusses key concepts related to correlation and regression analysis including correlation coefficient, regression coefficient, and the differences between the two. 2. It also defines core probability concepts such as random experiments, sample space, events, conditional probability, classical probability, and axiomatic probability. 3. Additionally, it covers topics like random variables and mathematical expectation as well as provides examples and properties for many of these statistical and probability terms.

Uploaded by

rezowansifatnavid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Final Exam Guidelines

Chapter-4

CORRELATION
The prmary objective of correlation analysis is to measure the strength or degree of
relationship between two or more variables. If the change in one variable affects a change in
the other variable,

the variables are said to be correlated.


For example, the production of paddy is dependent on the rainfall. Here production of paddy is
considered to be a dependent variable

Types of Correlation

➢ Positive or negative ( same direction )


● Imagine you have two things, like hours spent studying and exam scores.
● If, when one thing goes up (more study hours), the other thing also goes up (higher
exam scores), that's called a positive correlation.
● It's like saying they're moving in the same direction - both increasing or both decreasing
together

● Now, think about two different things, like hours spent watching TV and exercise levels.
● If, when one thing goes up (more TV time), the other thing goes down (less exercise),
that's a negative correlation.
● This is like saying they're moving in opposite directions - one increases while the other
decreases.

➢ Simple or multiple
● Correlation only between two variables is called simple correlation. For example,
correlation between income and expenditure.
● Under Multiple Correlation three or more than three variables are studied. Ex. Qd= f (
P,PC, PS, t, y )

➢ Linear or non-linear (follows a constant ratio )


● Think of two things, like the number of hours you study and your exam scores.
● If the relationship between the hours of study and exam scores follows a constant ratio
(like for every extra hour of study, your score goes up by a fixed amount), that's a linear
correlation.
● Visually, when you plot these points on a graph, they form a straight line.
● Now, imagine two different things, like the amount of ice cream you eat and your
happiness level.
● If the relationship between these two doesn't follow a constant ratio for every change
(maybe at first eating more ice cream makes you really happy, but after a certain point,
eating even more doesn't make you as happy), that's a non-linear correlation.
● Visually, when you plot these points on a graph, they form a curve or some other shape,
not a straight line.

Correlation Coefficient : The numerical value by which we measure the strength of


linear relationship between two or more variables is called correlation coefficient.

Comment on Correlation Coefficient:


1 = Perfect positive correlation

0.7 ≤ c < 1 = Strong positive correlation


0.4 ≤ c < 0.7 = Fairly positive correlation
0 < c < 0.4 = Weak positive correlation

0 = No correlation

0 > c > -0.4 = Weak negative correlation


-0.4 ≥ c > -0.7 = Fairly negative correlation
-0.7 ≥ c < -1 = Strong negative correlation

-1 = Perfect negative correlation


Properties of correlation coefficient:
1. Independent of change of origin and scale of measurement.
2. Lies between -1 to +1. i.e, -1< rxy < 1.
3. Correlation coefficient is Symmetric. i.e, rxy= ryx
4. Correlation coefficient is the geometric mean of regression coefficients i.e,
rxy=xyyx bb
5. For two independent variable correlation coefficient is zero
6. It is always unit free.

Regression: Regression is the functional relationship between two variables


and of the two variables one may represent cause and the other may represent
effect. The variable representing cause is known as independent variable and is
denoted by X. The variable X is also known as predictor variable or repressor.
The variable representing effect is known as dependent variable and is denoted
by Y. Y is also known as predicted variable.

Regression Coefficien:
Regression equation:
Properties of regression coefficient:
1.Independent of change of origin but not of scale.
2. lies between -∞ to +∞
3. Regression coefficient is not symmetric.
4. The geometric mean of regression coefficients is equal to correlation coefficien
5.The arithmetic mean of two regression coefficient is greater than correlation
Coefficient.
6. If one of regression coefficient is greater than unity the other must be less than
unity.
7. Regression coefficient is not pure number.

Uses of regression:
(i) Whether a relationship exists or not.
(ii) To find the strength of relationship.
(iii) Determination of mathematical equation.
(iv) Prediction the values of the dependent variables.

Difference Between Correlation Coefficient and Regression Coefficient:


1. Purpose:
○ Correlation Coefficient: It measures the strength and direction of a
linear relationship between two variables.
○ Regression Coefficient: It represents the slope of the regression line
in a regression analysis.
2. Representation:
○ Correlation Coefficient: Denoted by 'r,' it ranges from -1 to 1.
○ Regression Coefficient: Denoted by 'b' in simple linear regression, it
represents the slope of the regression line.
3. Calculation:
○ Correlation Coefficient: Calculated using the formula for Pearson
correlation (r)
○ Regression Coefficient: Determined through regression analysis.
4. Use Cases:
○ Correlation Coefficient: Used to assess the degree and direction of
association between two variables.
○ Regression Coefficient: Used in regression analysis to build a
predictive model.
Chapter-5
Random Experiment: Experiments are called random experiments if the
outcomes depend on chance and cannot be predicted with certainty.

Example: Tossing of a fair coin, throwing of dice etc are the examples of random
experiments.

Sample space: The collection or totality of all possible outcomes of a random


experiment is called sample space. It is usually denoted by S or Ω.

Event: Any subset of a sample space is called event. There are two types of
event: Simple event (only one sample point) and Compound event (more than
one sample point.)

Mutually exclusive events: Two events are said to be mutually exclusive if they
have no common points. If A and B are two mutually exclusive events, then
AB=ø.

Independent Event: Two events A and B are said to be independent if and only
if one of the following conditions holds:
(i) P[AB]=P[A]P[B]
(ii) P [A | B ] = P[A]
(iii) P [B | A ]= P[B]

Conditional Probability:
Classical Probability:

The classical definition of probability assumes that the elementary events are
mutually independent. In other words, the occurrence of one event does not
affect the probability of the other events.

Axiomatic probability: Suppose S is a sample space and A is an event of this


sample space. Then the probability of the event A, denoted by P[A] must satisfy
the following four axioms:
(i) P[A] 0
(ii) P[S] = 1
(iii) If A and B are mutually exclusive events, then P[AUB]= P[A]+P[B]

Addition law: The probability that a or b will occur is the sum of the probabilities
that a will happen and that b will happen, minus the probability that both a and b
will happen.

Chapter-6

Random variable with example:


A random variable is a real valued function whose values are determined with
the outcomes of a random experiment

Types of random variabl :

1. Discrete Random Variable: (take only isolated values.)


2. Continuous Random Variable: (can take any values between certain
limits)
MATHEMATICAL EXPECTATION:
If X is a discrete or connuous random variable with probability functon or
probability density function f(x), then the mathematcal expectation of X is usually
denoted by E[X] and defined by
Chapter-7

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