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ANDHRA PRADESH
Name : B. VIJAYA KUMAR
Designation : Lecturer
Branch : Commercial & Computer Practice (CCP)
Institute : GPW/Guntur
Year/Sem : II Yr Sem 4 (C-05)
Subject : QUANTITATIVE TECHNIQUES-II
Sub-Code : CCP-403
Topic : CORRELATION ANALYSIS
Duration : 50 minutes
Sub Topic : SPEARMAN’S RANK CORRELATION-I & II
Teaching Aids : PPT ANIMATION
CCP403.13 to 14 1
Objectives
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Recap
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Recap
Spearman’s RANK Correlation
6 D 2
Formula: R =1 3
N N
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Rank Correlation - Features
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Rank Correlation-Features
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Rank correlation-Types of problems
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Now, let us DO a problem
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Steps to Calculate Rank Correlation
Model 1: When Ranks are given
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Example 1
Lipsticks A B C D E F G
Simran 2 1 4 3 5 7 6
Abhisha 1 3 2 4 5 6 7
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6 D 2
R 1 3
N N
6 X 12
1
73 7
= 1 – 0.214 = 0.786
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Example 2
Judge / A B C D E
Names
X 1 2 3 5 4
Y 2 1 4 3 5
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Solution to Ex. 2
X Y D D2
R1 R2 (R1- R2)
1 2 -1 1
2 1 +1 1
3 4 -1 1
5 3 +2 4
4 5 -1 1
D 8
2
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Solution contd
6 D 2
R 1 3
N N
6X 8
1 3
5 5
6X 8
1
125 5
6X 8
1
120
1 0.4
0.6
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Example 3
Ten competitors in a beauty contest are ranked by three
judges in the following order
1ST Judge 1 5 4 8 9 6 10 7 3 2
2nd Judge 4 8 7 6 5 9 10 3 2 1
3rd Judge 6 7 8 1 5 10 9 2 3 4
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Solution to Ex. 3
6 D12
R 1
N3 N
6x74
1 3
10 10
444
1
990
0.55
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• Rank correlation between the Judgement of
3rd and 1st Judges
6 D 2 2
R 1
N3 N
6x156
1 3
10 10
936
1
990
0.05
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c) Rank correlation between the Judgement of
2nd and 3rd Judges
6 D32
R 1
N3 N
6x44
1 3
10 10
264
1
990
0.73
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Solution contd
Interpretation :
Coefficient correlation is maximum in the
Judgement of 2nd and 3rd Judges i.e. 0.73
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Example 4
The coefficient of the Rank Correlation between
debenture prices and share prices is 0.143. If the sum
of squares of the difference in ranks is 48, find the
value of N.
Solution: 6 D 2
R 1 3
N N
6(48)
0.143 1 3
N N
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Solution contd
0.857 (N3-N) = 288
(N3 – N) = 288/0.857 = 336
N3 – N – 336 = 0
N3 – N – 343 + 7 = 0
(N-7)N2 + 7N (N-7) + 48(N-7) = 0
(N-7)(N2 -7N + 48) = 0
N - 7 = 0, i.e., N = 7
Therefore, value of N = 7
PIN 1 2 3 4 5 6 7
OO 7 1 4 6 5 3 2
CP 5 1 2 3 4 6 7
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Solution to Ex. 5
6 D 2
R 1 3
N N
6x49
1 3
7 7
1 0.875
0.125
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Summary
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Quiz
(a) To calculate PE
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Quiz
1) Beauty and/or intelligence can
be measured by:
(a) Standard Deviation
(c) Spearman
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Frequently asked Questions:
Short Questions:
2) Explain briefly features of Spearman’s Rank
Correlation
3) Calculate Spearman’s Rank Correlation of 10 boys in
2 subjects.
TW 3 5 8 4 7 10 2 1 6 9
SH 6 4 9 8 1 2 3 10 5 7
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Ans: - 0.297 31
Assignment
1) 10 women in a beauty contest are ranked by 3
judges as follows: Calculate Rank Correlation to
decide which pair of judges has nearest approach to
common tastes in beauty
Judge 1 1 6 5 10 3 2 4 9 7 8
Judge 2 3 5 8 4 7 10 2 1 6 9
Judge 3 6 4 9 8 1 2 3 10 5 7
Share 73 85 78 75 77 87 83 85
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Assignment
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