CS3352 FOUNDATIONS OF DATA SCIENCE

II YEAR / III SEMESTER B.Tech.- INFORMATION TECHNOLOGY

UNIT III
DESCRIBING RELATIONSHIPS

COMPILED BY,

Prof.M.KARTHIKEYAN, M.E., HoD / IT

VERIFIED BY

HOD PRINCIPAL CEO/CORRESPONDENT

DEPARTMENT OF INFORMATION TECHNOLOGY

SENGUNTHAR COLLEGE OF ENGINEERING, TIRUCHENGODE – 637 205.

 UNIT III
DESCRIBING RELATIONSHIPS

 Correlation
 Scatter plots
 correlation coefficient for quantitative data
 computational formula for correlation coefficient
 Regression –regression line
 least squares regression line
 Standard error of estimate
 interpretation of r2
 multiple regression equations
 regression towards the mean
 LIST OF IMPORTANT QUESTIONS
UNIT III
DESCRIBING RELATIONSHIPS
PART – A
1. What do you mean by Correlation?
2. What do you mean by correlation coefficient?
3. Write down the Uses of correlations.
4. What is Multiple Correlation ?
5. State in each case whether there is
(a) Positive Correlation
(b) Negative Correlation
(c) No Correlation
Sl.No Particulars
1 Price of commodity and its demand
2 Yield of crop and amount of rainfall
3 No of fruits eaten and hungry of a person
4 No of units produced and fixed cost per unit
5 No of girls in the class and marks of boys
6 Ages of Husbands and wife
7 Temperature and sale of woollen garments
8 Number of cows and milk produced
9 Weight of person and intelligence
10 Advertisement expenditure and sales volume

6. List out the Properties of Coefficient of Correlation.

7. What is Regression analysis ?
8. What are the Uses of Regression Analysis?
9. Distinguish the Correlation and Regression.
10. What is Regression Coefficient?

PART - B

1. Explain in detail about the types of Correlation.

2. Given the following pairs of values:
Capital Employed (Rs. In Crore) 1 2 3 4 5 7 8 9 11 12
Profit (Rs. In Lakhs) 3 5 4 7 9 8 10 11 12 14
(a) Draw a scatter diagram
(b) Do you think that there is any correlation between profits and
capital employed? Is it positive or negative? Is it high or low?
3. From following information find the correlation coefficient between
advertisement expenses and sales volume using Karl Pearson’s coefficient of
correlation method.
Firm 1 2 3 4 5 6 7 8 9 10
Advertisement Exp. (Rs. In 11 13 14 16 16 15 15 14 13 13
Lakhs)
Sales Volume (Rs. In Lakhs) 50 50 55 60 65 65 65 60 60 50

4. Find the correlation coefficient between age and playing habits of the following
students using Karl Pearson’s coefficient of correlation method.
Age 15 16 17 18 19 20
Number of students 250 200 150 120 100 80
Regular Players 200 150 90 48 30 12
5. Find Karl Pearson’s coefficient of correlation between capital employed and profit
obtained from the following data.
Capital Employed (Rs. In Crore) 10 20 30 40 50 60 70 80 90 100
Profit (Rs. In Crore) 2 4 8 5 10 15 14 20 22 50

LIST OF IMPORTANT QUESTIONS

UNIT III
 DESCRIBING RELATIONSHIPS

PART – A
1. What do you mean by Correlation?
Correlation is a statistical technique to ascertain the association or relationship
between two or more variables. Correlation analysis is a statistical technique to study the
degree and direction of relationship between two or more variables.
2. What do you mean by correlation coefficient?
A correlation coefficient is a statistical measure of the degree to which changes
to the value of one variable predict change to the value of another. When the fluctuation
of one variable reliably predicts a similar fluctuation in another variable, there’s often a
tendency to think that means that the change in one causes the change in the other.
3. Write down the Uses of correlations:
I. Correlation analysis helps inn deriving precisely the degree and the direction of
such relationship.
II. The effect of correlation is to reduce the range of uncertainity of our prediction.
The prediction based on correlation analysis will be more reliable and near to
reality.
III. Correlation analysis contributes to the understanding of economic behaviour,
aids in locating the critically important variables on which others depend, may
reveal to the economist the connections by which disturbances spread and
suggest to him the paths through which stabilizing farces may become effective
IV. Economic theory and business studies show relationships between variables
like price and quantity demanded advertising expenditure and sales promotion
measures etc.
V. The measure of coefficient of correlation is a relative measure of change.
Types of Correlation: Correlation is described or classified in several different
ways. Three of the most important are: I. Positive and Negative II. Simple, Partial
and Multiple III. Linear and non-linear
4. What is Multiple Correlation ?
When three or more variables are studied, it is a case of multiple correlation. For
example, in above example if study covers the relationship between student marks,
attendance of students, effectiveness of teacher, use of teaching aids etc, it is a case of
multiple correlation.
5. State in each case whether there is
a) Positive Correlation
 b) Negative Correlation
c) No Correlation
Sl.No Particulars Solution
1 Price of commodity and its demand Negative
2 Yield of crop and amount of rainfall Positive
3 No of fruits eaten and hungry of a person Negative
4 No of units produced and fixed cost per unit Negative
5 No of girls in the class and marks of boys No Correlation
6 Ages of Husbands and wife Positive
7 Temperature and sale of woollen garments Negative
8 Number of cows and milk produced Positive
9 Weight of person and intelligence No Correlation
10 Advertisement expenditure and sales volume Positive
6. List out the Properties of Coefficient of Correlation.
 The coefficient of correlation always lies between – 1 to +1, symbolically it can
written as – 1 ≤ r ≤ 1.
 The coefficient of correlation is independent of change of origin and scale.
 The coefficient of correlation is a pure number and is independent of the units of
measurement. It means if X represent say height in inches and Y represent say
weights in kgs, then the correlation coefficient will be neither in inches nor in kgs but
only a pure number.
 The coefficient of correlation is the geometric mean of two regression coefficient,
symbolically 𝑟2= bxy ∗ byx
 If X and Y are independent variables then coefficient of correlation is zero.
 A study of measuring the relationship between associated variables, wherein one
variable is dependent on another independent variable, called as Regression. It is
developed by Sir Francis Galton in 1877 to measure the relationship of height
between parents and their children.

7. What is Regression analysis?

Regression analysis is a statistical tool to study the nature and extent of
functional relationship between two or more variables and to estimate (or predict) the
unknown values of dependent variable from the known values of independent variable.

8. What are the Uses of Regression Analysis?

1. It provides estimates of values of the dependent variables from values of
independent variables.
2. It is used to obtain a measure of the error involved in using the regression line as a
basis for estimation.
3. With the help of regression analysis, we can obtain a measure of degree of
association or correlation that exists between the two variables.
4. It is highly valuable tool in economies and business research, since most of the
problems of the economic analysis are based on cause and effect relationship.
9. Distinguish the Correlation and Regression.
Correlation Regression

‘Correlation’ as the name says it ‘Regression’ explains how an

determines the interconnection or a independent variable is
co-relationship between the variables. numerically associated with the
dependent variable.

In Correlation, both the independent However, in Regression, both

and dependent values have no the dependent and
difference. independent variable are
different.

The primary objective of Correlation When it comes to regression,

is, to find out a quantitative/numerical its primary intent is, to reckon
value expressing the association the values of a haphazard
between the values. variable based on the values of
the fixed variable.

Correlation stipulates the degree to However, regression specifies

which both of the variables can move the effect of the change in the
together. unit, in the known variable(p)
on the evaluated variable (q).

Correlation helps to constitute the Regression helps in estimating

connection between the two variables. a variable’s value based on
another given value.

10. What is Regression Coefficient?

The quantity “b” in the regression equation is called as the regression coefficient or
slope coefficient. Since there are two regression equations, therefore, we have two
regression coefficients.
1.
Regression Coefficient X on Y, symbolically written as “bxy”
2.
Regression Coefficient Y on X, symbolically written as “byx

PART – B
1. Explain in detail about the types of Correlation.
Correlation is described or classified in several different ways. Three of the most
important are:
I. Positive and Negative

II. Simple, Partial and Multiple

III. Linear and non-linear

I. Positive, Negative and Zero Correlation:

Whether correlation is positive (direct) or negative (in-versa) would depend upon the
direction of change of the variable.
Positive Correlation: If both the variables vary in the same direction, correlation is said to
be positive. It means if one variable is increasing, the other on an average is also
increasing or if one variable is decreasing, the other on an average is also deceasing, then
the correlation is said to be positive correlation. For example, the correlation between
heights and weights of a group of persons is a positive correlation.
Height 1 1 1 1 1 1 1 1
(cm) : X 5 6 6 6 6 7 7 7
8 0 3 6 8 1 4 6
Weight (kg) : Y 60 62 64 65 67 69 71 72
Negative Correlation: If both the variables vary in opposite direction, the correlation is
said to be negative. If means if one variable increases, but the other variable decreases or
if one variable decreases, but the other variable increases, then the correlation is said to
be negative correlation. For example, the correlation between the price of a product and
its demand is a negative correlation.
Price of Product (Rs. Per Unit) : X 6 5 4 3 2 1
Demand (In Units) : Y 75 120 175 250 215 400
Zero Correlation: Actually it is not a type of correlation but still it is called as zero or no
correlation. When we don’t find any relationship between the variables then, it is said to be
zero correlation. It means a change in value of one variable doesn’t influence or change
the value of other variable. For example, the correlation between weight of person and
intelligence is a zero or no correlation.

II. Simple, Partial and Multiple Correlation:

The distinction between simple, partial and multiple correlation is based upon the
number of variables studied.
Simple Correlation: When only two variables are studied, it is a case of simple
correlation. For example, when one studies relationship between the marks secured by
student and the attendance of student in class, it is a problem of simple correlation. Partial
Correlation: In case of partial correlation one studies three or more variables but
considers only two variables to be influencing each other and the effect of other
influencing variables being held constant. For example, in above example of relationship
between student marks and attendance, the other variable influencing such as
effective teaching of teacher, use of teaching aid like computer, smart board etc are
assumed to be constant.
Multiple Correlation: When three or more variables are studied, it is a case of multiple
correlation. For example, in above example if study covers the relationship between
student marks, attendance of students, effectiveness of teacher, use of teaching aids etc,
it is a case of multiple correlation.
III. Linear and Non-linear Correlation:
Depending upon the constancy of the ratio of change between the variables, the
correlation may be Linear or Non-linear Correlation.
Linear Correlation: If the amount of change in one variable bears a constant ratio to the
amount of change in the other variable, then correlation is said to be linear. If such
variables are plotted on a graph paper all the plotted points would fall on a straight line.
For example: If it is assumed that, to produce one unit of finished product we need 10
units of raw materials, then subsequently to produce 2 units of finished product we need
double of the one unit.
Raw material : X 10 20 30 40 50 60
Finished Product : Y 2 4 6 8 10 12
Non-linear Correlation: If the amount of change in one variable does not bear a constant
ratio to the amount of change to the other variable, then correlation is said to be non-
linear. If such variables are plotted on a graph, the points would fall on a curve and not on
a straight line. For example, if we double the amount of advertisement expenditure, then
sales volume would not necessarily be doubled.
Advertisement Expenses : X 10 20 30 40 50 60
Sales Volume : Y 2 4 6 8 10 12
2. Given the following pairs of values:
Capital Employed (Rs. In Crore) 1 2 3 4 5 7 8 9 11 12
Profit (Rs. In Lakhs) 3 5 4 7 9 8 10 11 12 14
a) Draw a scatter diagram
b) Do you think that there is any correlation between profits and capital
employed? Is it positive or negative? Is it high or low?

Solution:
From the observation of scatter diagram we can say that the variables are positively
correlated. In the diagram the points trend toward upward rising from the lower left hand
corner to the upper right hand corner, hence it is positive correlation. Plotted points are in
narrow band which indicates that it is a case of high degree of positive correlation.
16
14

12
Profit (Rs. in Lakhs)

10

0
0 2 4 6 8 10 12 14
Capital Employed (Rs. in Crore)

Karl Pearson’s Coefficient of Correlation:

Karl Pearson’s method of calculating coefficient of correlation is based on the covariance of

the two variables in a series. This method is widely used in practice and the coefficient of
correlation is denoted by the symbol “r”. If the two variables under study are X and Y, the following
formula suggested by Karl Pearson can be used for measuring the degree of relationship of
correlation.
 Above different formula’s can be used in different situation depending upon the information
given in the problem.

3. From following information find the correlation coefficient between

advertisement expenses and sales volume using Karl Pearson’s coefficient of
correlation method.
Firm 1 2 3 4 5 6 7 8 9 10
Advertisement Exp. (Rs. In 11 13 14 16 16 15 15 14 13 13
Lakhs)
Sales Volume (Rs. In Lakhs) 50 50 55 60 65 65 65 60 60 50

Solution:
Let us assume that advertisement expenses are variable X and sales volume are variable Y.
Calculation of Karl Pearson’s coefficient of correlation
Firm X Y x=X- y=Y- xy
x2 y2
Ẋ Ẏ
1 11 50 -3 9 -8 64 24
2 13 50 -1 1 -8 64 8
3 14 55 0 0 -3 9 0
4 16 60 2 4 2 4 4
5 16 65 2 4 7 49 14
6 15 65 1 1 7 49 7
7 15 65 1 1 7 49 7
8 14 60 0 0 2 4 0
9 13 60 -1 1 2 4 -2
10 13 50 -1 1 -8 64 8
140 580 22 360 70
∑X ∑Y ∑x2 ∑y2 ∑xy

∑xy
r= √∑x2 ∑y2

70 70 = 0.7866
= √22∗360 = 88.9944
 Interpretation: From the above calculation it is very clear that there is high degree of
positive correlation i.e. r = 0.7866, between the two variables. i.e. Increase in
advertisement expenses leads to increased sales volume.

4. Find the correlation coefficient between age and playing habits of the following students
using Karl Pearson’s coefficient of correlation method.

Age 15 16 17 18 19 20
Number of students 250 200 150 120 100 80
Regular Players 200 150 90 48 30 12

Solution:

To find the correlation between age and playing habits of the students, we need to compute
the percentages of students who are having the playing habit.

Percentage of playing habits = No. of Regular Players / Total No. of Students * 100

Now, let us assume that ages of the students are variable X and percentages of playing habits are
variable Y.

Calculation of Karl Pearson’s coefficient of correlation

Percentage
No of Regular
Age (X)
Students Players
of Playing X- (X - Ẋ)2 Y- (Y - Ẏ)2 (X - Ẋ)(Y -
Habits (Y) Ẏ)
Ẋ Ẏ
15 250 200 80 -2.5 6.25 30 900 -75
16 200 150 75 -1.5 2.25 25 625 -37.5
17 150 90 60 -0.5 0.25 10 100 -5
18 120 48 40 0.5 0.25 -10 100 -5
19 100 30 30 1.5 2.25 -20 400 -30
20 80 12 15 2.5 6.25 -35 1225 -87.5
105 300 17.5 3350 -240
∑X ∑Y ∑x2 ∑y2 ∑xy

Ẋ = ∑X = 105 = 17.5 Ẏ = ∑Y = 300

= 50
n 6 n 6

∑(X−Ẋ)(Y−Ẏ) = −240
r= √∑(X−Ẋ)2 ∑(Y−Ẏ)2 √17.5∗3350

−240 = -0.9912
= 242.126
Interpretation: From the above calculation it is very clear that there is high degree of negative
correlation i.e. r = -0.9912, between the two variables of age and playing habits. i.e. Playing habits
among students decreases when their age increases.

5. Find Karl Pearson’s coefficient of correlation between capital employed and

profit obtained from the following data.

Capital Employed (Rs. In Crore) 10 20 30 40 50 60 70 80 90 100

Profit (Rs. In Crore) 2 4 8 5 10 15 14 20 22 50

Solution:

Let us assume that capital employed is variable X and profit is variable Y.

Calculation of Karl Pearson’s coefficient of correlation
X Y 2 2 XY n∑XY−∑X ∑Y
X Y r=
10 2 100 4 20 √[n(∑X2) − (∑X)2][n(∑Y2) − (∑Y)2]
20 4 400 16 80
30 8 900 64 240
40 5 1600 25 200 (10 ∗ 11500) − (550 ∗ 150)
r=
50 10 2500 100 500 √[(10∗38500)−(5502)] [ (10∗4014)−(1502)]
60 15 3600 225 900
70 14 4900 196 980
80 20 6400 400 1600 (1,15,000) − (82,500)
90 22 8100 484 1980 r= √[(3,85,000)−(3,02,500)] [ (40,140)−(22,500)]
100 50 10000 2500 5000
550 150 38500 4014 11500
32,500
∑X ∑Y ∑X2 ∑Y2 ∑XY r= 32,500
√(82,500) (17,640) = √1455300000

32,500 = 0.8519
r= 38148.3945
 6. After investigation it has been found the demand for automobiles in a city depends mainly, if
not entirely, upon the number of families residing in that city. Below are the given figures for
the sales of automobiles in the five cities for the year 2019 and the number of families
residing in those cities.
City No. of Families (in lakhs): X Sale of automobiles (in ‘000):
Y
Belagavi 70 25.2
Bangalore 75 28.6
Hubli 80 30.2
Kalaburagi 60 22.3
Mangalore 90 35.4
Fit a linear regression equation of Y on X by the least square method and estimate the sales for the
year 2020 for the city Belagavi which is estimated to have 100 lakh families assuming that the
same relationship holds true.

Solution:

Calculation of Regression Equation

City X Y XY
X2
Belagavi 70 25.2 4900 1764
Bangalore 75 28.6 5625 2145
Hubli 80 30.2 6400 2416
Kalaburagi 60 22.3 3600 1338
Mangalore 90 35.4 8100 3186
375 141.7 28,625 10,849
∑X ∑Y ∑X2 ∑XY
Regression equation of Y on X: Y = a + bX

The two normal equations are:

∑Y = Na + b∑X
∑XY = a∑X + b∑X2
Substituting the values in above normal equations, we get
141.7 = 5a + 375b.................................................(i)
10849= 375a + 28625b............................................(ii)
Let us solve these equations (i) and (ii) by simultaneous equation method Multiply
equation (i) by 75 we get 10627.5 = 375a + 28125b
Now rewriting these equations:
10627.5 = 375a + 28125b
10849 = 375a + 28625b
(-) (-) (-) .
-221.5 = -500b

Therefore now we have -221.5 = -500b, this can rewritten as 500b = 221.5
Now,
b = 221.5 = 0.443
500

Substituting the value of b in equation (i), we get

141.7 = 5a + (375 * 0.443)
141.7 = 5a + 166.125
5a = 141.7 - 166.125
5a = -24.425
a = -24.425/5
a = -4.885

Thus we got the values of a = - 4.885 and b

= 0.443 Hence, the required regression
equation of Y on X:

Y = a + bX => Y = -4.885 + 0.443X

Estimated sales of automobiles (Y) in city Belagavi for the year 2020, where
number of families (X) are 100(in lakhs):
Y = -4.885 + 0.443X
Y = -4.885 + (0.443 * 100)
Y = -4.885 + 44.3
Y = 39.415 (‘000)
Means sales of automobiles would be 39,415 when number of families are 100,00,000

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7. Explain in detail about method of measurement of Correlation.

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