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Module 3 Topic 3 Statsap

This document discusses measuring the linear relationship between two variables and generating numerical measures using computers. It provides an example of using Excel to calculate the covariance and correlation coefficient between test scores in statistics and accounting for 20 students. The covariance was positive, indicating a direct relationship between the scores. The correlation coefficient was 0.166462, indicating a weak positive correlation. The document also provides an exercise involving traffic and sales data from 22 stores to calculate descriptive statistics, histograms, covariance and correlation coefficient using Excel.

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Mila Mercado
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64 views3 pages

Module 3 Topic 3 Statsap

This document discusses measuring the linear relationship between two variables and generating numerical measures using computers. It provides an example of using Excel to calculate the covariance and correlation coefficient between test scores in statistics and accounting for 20 students. The covariance was positive, indicating a direct relationship between the scores. The correlation coefficient was 0.166462, indicating a weak positive correlation. The document also provides an exercise involving traffic and sales data from 22 stores to calculate descriptive statistics, histograms, covariance and correlation coefficient using Excel.

Uploaded by

Mila Mercado
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Module 3 Topic 3

1. Measure of Linear Relationship Between Two Variables


2. Generating Numerical Measures Using Computers or Soft wares

Measure of Linear Relationship Between Two Variables


If you remember our example using the test scores of 20-item exam, the test score data is a
single variable. If you are interested in the relationship between two variables, for example test
score in statistics and test score in accounting of the student, then we look at the covariance
and the correlation coefficient as descriptive statistics of the relationship of these variables.

To compute the covariance, encode the data in excel, click fx, select statistical and find the
COVARIANCE.S then press OK

What will appear is array 1 and array 2. Highlight statistics score for Array 1 and Accounting
Score for Array 2. Then press OK.
Your covariance is 1.689473684. To interpret the result, you only need to look at whether it is
positive or negative. If the answer is positive, there is positive linear association or relationship
between the two scores. If it negative, there is negative linear association or relationship
between the two scores. Positive answer means that the scores of the two is directly associated
with one another and negative answer means the scores of the two is inversely associated with
one another.

To compute for the correlation coefficient, using the same data in excel, click fx, statistical and
choose Pearson. The same thing is true, Array 1 will be your scores in statistics and Array 2 will
be your scores in accounting.

Correlation Coefficient is 0.166462. There is no one way of interpreting the coefficient of association.
Different authors will have different interpretation but we will use the interpretation used by the
majority. But remember to look only at the absolute value then look at the sign (using above criteria) to
Interpret the coefficient.
Coefficient Interpretation
+-1 A perfect (positive/negative) linear relationship
+-0.70 Strong (positive/negative) linear relationship
+-0.50 Moderate (positive/negative) linear relationship
+-0.30 Weak (positive/negative) linear relationship
0 No linear relationship

Therefore, 0.166462 means a weak positive correlation between the score in statistics and
accounting. It means that there is relationship between the two variables but the relation is
weak and cannot be used to predict the association of the two scores in the next test.

Generating Numerical Measures Using Computers


I. Using your knowledge in previous modules solve the following problem using Excel. Name
your excel file as Module 3-Statsap and submit it through Formative Assessment 3.

a. Twenty-two (22) sales managers all over the country were asked about their store’s volume
of traffic (or the number of customers who visited the store) per week and the store’s volume
of sales in pesos per week. The result is as follows:

Store Number Traffic Sales


01 78 220,212
02 145 278,413
03 89 197,903
04 210 421,436
05 225 387,321
06 197 323,448
07 134 187,600
08 227 193,456
09 302 267,902
10 211 258,967
11 156 301,168
12 179 221,379
13 95 208,115
14 187 349,008
15 318 290,765
16 331 301,453
17 149 115,559
18 125 179,925
19 134 289,455
20 219 398,009
21 247 376,112
22 222 279,115

Required:
a. Make a histogram using traffic and sales.
b. Compute the mean, median and mode of each of the two variables.
c. Compute the standard deviation, variance and inter-quartile range of each of the two
variables.
d. Compute the covariance and correlation coefficient and interpret the results.

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