DEPARTMENT OF TECHNICAL EDUCATION

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

On Completion of this period, the you would be

able to understand

 Calculate Spearman’s RANK Correlation

CCP403.13 to 14 2
Recap

Spearman’s RANK Correlation

 Charles Edward Spearman developed this method in

1904
 Based on ranking different items in the variable

CCP403.13 to 14 3
Recap
Spearman’s RANK Correlation

 Useful where actual item values are not given

6 D 2
Formula: R =1  3
N N

Where R = Co-efficient of Correlation,

D = Rank Differences,
N = No of Pairs

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Rank Correlation - Features

 Sum of differences of ranks between 2 variables is

ZERO i.e., ∑D = 0
 It is distribution-free (Non-parametric)
 No strict assumptions on population or sample in
data collection.
 Useful to measure the qualitative characters like
beauty, intelligence etc.,

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Rank Correlation-Features

 It is nothing but Karl Pearson’s COC between

Ranks
 Interpretation just like Karl Pearson’s COC
 Varies between +1 and -1

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Rank correlation-Types of problems

 When RANKS are given

 When RANKS are NOT given

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Now, let us DO a problem

In the first model, i.e.,

a) When Ranks are given

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Steps to Calculate Rank Correlation
Model 1: When Ranks are given

 Take the difference of two ranks i.e., (R1 – R2)

and name them as D.

 Square the differences .. .. D2

 Get the total of D2 column, i.e., ∑D2

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Example 1

Two ladies were asked to rank 7 different types

of lipsticks. The ranks are given below:

Lipsticks A B C D E F G
Simran 2 1 4 3 5 7 6
Abhisha 1 3 2 4 5 6 7

Calculate Spearman’s RANK Correlation.

CCP403.13 to 14 10

C-05 CCP-403.13 & 14 10

Solution:

Calculation of Spearman’s RANK CORRELATION

X (R1) Y (R2) (R1 – R2) D D2

2 1 +1 1
1 3 -2 4
4 2 +2 4
3 4 -1 1
5 5 0 0
7 6 +1 1
6 7 -1 1
CCP403.13 to 14
∑D2 = 12 11
Solution contd

6 D 2
R  1 3
N N

6 X 12
 1
73  7

= 1 – 0.214 = 0.786

Therefore, Rank Correlation = 0.786

CCP403.13 to 14 12
Example 2

Two Judges X and Y assign the following

ranks to five entries in a beauty contest.
Calculate Rank Correlation Co-efficient

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

Calculation of Rank Correlation Co-efficient

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

Use the Rank correlation coefficient to discuss which

pair of Judges have the nearest approach to common
tastes in beauty

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Solution to Ex. 3

Calculation of Rank Correlation Co-efficient

Rank by 1ST Rank by 2nd Rank by 3rd

(R1  R2 )2 (R3  R1 )2 (R2  R3 )2
Judge Judge Judge
R1 R2 R3 D12 D22 D32
1 4 6 9 25 4
5 8 7 9 4 1
4 7 8 9 16 1
8 6 1 4 49 25
9 5 5 16 16 0
6 9 10 9 16 1
10 10 9 0 1 1
7 3 2 16 25 1
3 2 3 1 0 1
2 1 4 1 4 9
 D2  156  D 2  44
2
 D1  74
2
3
CCP403.13 to 14 17
Solution contd

• Rank correlation between the Judgement of

1st and 2nd Judges

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

 Both the Judges have the nearest approach to

common tastes in beauty

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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

Values given in problem, R = 0.143, ∑D2 = 48

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

Since, b2 – 4ac is negative, values of N belong to the

set of complex numbers
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Example 5

Ranks of 7 students in 2 subjects are given

below.

PIN 1 2 3 4 5 6 7

OO 7 1 4 6 5 3 2

CP 5 1 2 3 4 6 7

Calculate Spearman’s RANK Correlation.

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 Solution to Ex. 5

Calculation of Spearman’s RANK CORRELATION

X = (R1) Y = (R2) (R1 – R2) = D D2

7 5 +2 4
1 1 -0 0
4 2 +2 4
6 3 +3 6
5 4 1 1
3 6 -3 9
2 7 -5 25
∑D2 = 49
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Solution contd

6 D 2
R  1 3
N N
6x49
 1 3
7 7
 1  0.875
 0.125

Therefore, Rank Correlation = 0.125

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Summary

 Spearman’s Rank Correlation is calculated

when quantitative measures are not suitable to
measure certain factors

Eg: Beauty, leadership, intelligence

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Quiz

1) Spearman’s Rank Correlation is used:

(a) To calculate PE

(b) To measure beauty, leadership etc.,

(c) To draw a pie diagram

(d) All of the above

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Quiz
1) Beauty and/or intelligence can
be measured by:
(a) Standard Deviation

(b) Quartile Deviation

(c) Karl Pearson’s COC

(d) None of the above

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Quiz
1) Coefficient of Rank Correlation was
propounded by:
(a) Karl Pearson

(b) Simpson & Kafka

(c) Spearman

(d) None of the above

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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

CCP403.13 to 14
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

Hint: Calculate Rank Correlation between Judges 1

& 2, 2 & 3 and 1 & 3.
Ans: J1&2: -0.212, J2&3: -0.297, J1&3: 0.636
CCP403.13 to 14 32
Assignment

2) Given below are prices of shares and debentures of

XYZ company. Using Rank Correlation method,

determine their relationship
Year 1 2 3 4 5 6 7 8
Debenture 97 99 98 97 96 98 99 97

Share 73 85 78 75 77 87 83 85

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Assignment

4) For more problems on Spearman’s RANK Correlation,

please refer to:
a) “Statistics – Problems and Solutions” by V.K.Kapoor
b) “Fundementals of Statistics” by S.C.Gupta
c) “Statistical Methods” by S.P.Gupta
d) “Quantitative Techniques” by S.L.Agarwal &
Bharadwaj
e) Any other text book suggested by your teacher

f) Previous years’ exam question papers of SBTET

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