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Business Statistic Presentation

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14 views

Business Statistic Presentation

Uploaded by

Rony Saha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 22

DEAR

AUDIENCE,

Welcome To
Our
Presentation
CORRELATION

AND

REGRESSION ANALYSIS
CONTENT
 Introduction
 Why should we learn correlation and regression
 Significance of the study of Correlation
 Correlation vs Causation
 Types of Correlation
 Methods of studying Correlation
 Coefficient of correlation
 Coefficient of Determination
 Regression Analysis
 The linear Bivariate Regression Model
 Types of Regression Model
 Regression Lines
 Regression Equations
 Assumptions of the linear Regression model
 Regression Coefficient
 Difference between correlation and regression
INTRODUCTION

Correlation

Relationships between two or more than two variables


is studied is called correlation

Regression

Change one variable when a specific volume,


examines how other variables that show a change
WHY SHOULD WE LEARN CORRELATION AND
REGRESSION

 Correlation analysis is a method of statistical


evaluation used to study the strength of a relationship
between two, numerically measured, continuous variables
(e.g. height and weight). This particular type of analysis is
useful when a researcher wants to establish if there are
possible connections between variables.

 Use regression analysis to describe the relationships


between a set of independent variables and
the dependent variable . Regression analysis produces
a regression equation where the coefficients represent the
relationship between each independent variable and the
dependent variable. You can also use the equation to
make predictions
SIGNIFICANCE OF THE STUDY OF
CORRELATION

1. Correlation analysis helps to measure the degree &


direction of correlation in one number
Ex:- Age and height, Blood pressure and pulse rate

2. When there is close correlation between two


variable, the value of one variable can be estimated
given the known value of the other variable.

3. Predictions can be based on correlation analysis .

4. There are also other methods for forecasting


purposes
CORRELATION VS CAUSATION
Correlation : When income is averaged and
compared, there is a strong correlation between
gender and income. This is due to a myriad of
historical, systemic, and economic factors that impact
men and women differently in the workplace.

Causation : When income is averaged and compared,


there is a strong correlation between gender and
income. This must be because women must not be as
smart, hard-working, or good with money as men.

Correlation : When more firefighters are fighting a fire,


the bigger the fire is observed to be.

Causation : The additional firefighters made the fire


bigger.
EXAMPLE
TYPES OF CORRELATION

1. Positive and Negative


2. Simple, Partial and Multiple
3. Linear and non-linear
METHODS OF CORRELATION

1. Scatter diagram method

2. Graphic method

3. Karl Pearson’s coefficient of correlation

4. Rank correlation method


COEFFICIENT OF CORRELATION

A correlation coefficient is a numerical measure of


some type of correlation, meaning a statistical
relationship between two variables. The variables may
be two columns of a given data set of observations ,
often called a sample, or two components of a
multivariate random variable with a known
distribution.
COEFFICIENT OF DETERMINATION

The coefficient of determination is the square of the


correlation between predicted y scores and actual y
scores; thus, it ranges from 0 to 1. with linear
regression, the coefficient of determination is also
equal to the square of the correlation between x and y
scores.
WHAT IS REGRESSION ?

 The statistical tool with the help of which we are in


position to estimate the unknown values of one
variable from known values of another variable is
called regression.
DISCUSS THE LINEAR BIVARIATE
REGRESSION MODEL

 Linear regression quantifies the relationship


between one or more predictor predictor variables
and one outcome variable.
The regression analysis helps in three
important ways :

1.It provides estimates of values of the dependent


variables from values of independent variables.

2. The second goal of regression is to obtain a


measure of the error involved in using the regression
line as a basis for estimations.

3. with the help of regression analysis, we can obtain a


measure of the degree of association or correlation
that exists between the two variables.
REGRESSION EQUATION
ASSUMPTION OF THE LINEAR REGRESSION MODEL

 Linear functional form


 Fixed independent variables
 independent observations
 Normality of the residuals or errors
 No multicollinearity
 No autocorrelation of the errors
 No outlier distortion
REGRESSION COEFFICIENT

 The regression coefficient of X on Y is represented by the


symbol bxy that measures the change in X for the unit
change in Y. Symbolically, it can be represented as:

When the deviations are obtained from the assumed mean, the
following formula is used:

The byx can be calculated by using the following formula when the
deviations are taken from the assumed means:
DIFFERENCE BETWEEN CORRELATION
AND REGRESSION

 There are two important points of difference


between correlation and regression analysis

1. whereas correlation coefficient is a measure of degree of


relationship between x and y, the objective of regression
analysis is to study the “nature of relationship” between the
variables.

2. The cause and effect relation is clearly indicated through


regression analysis than by correlation.
DO YOU HAVE ANY
QUESTIONS FOR US ?

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