Chandigarh Group of Colleges,Jhanjeri
Master of Business Administration
MBA-II Semester
MBA 201-18
Business Analytics for
Decision Making
Topic: Partial Correlation
Dr. Rajinder Kaur Bhogal
Associate Professor
EMAIL:-rajinder.bilkhu@gmail.com
CAMPUS: JHANJERI, MOHALI
Objective
• The objective of this paper is to understanding of the
research process, tools and techniques in order to
facilitate managerial decision making.
Chandigarh Group of colleges,Jhanjeri
MBA Batch 2018 onwards
MBA 201-18
Business Analytics for Decision Making
Unit I
• CO1: Explain fundamental concepts of data collection,
classification and tabulation. Understanding (Level2)
• Introduction to Statistics: Meaning, Importance, Applications of
inferential statistics in managerial decision making.
• Collection of Data: concept of primary data and secondary data, sources
of primary data and secondary data,
• Classification and Tabulation of Data: Concept and types of
classification, construction of frequency distributions, tabulation of data:
role of tabulation, parts of table, rules of tabulation, review of table, types
of table.
• Sampling: Concept, definitions, census and sampling, probability and non-
probability methods of sampling, relationship between sample size and
errors.
•
Unit II
CO2: Outline the concepts of sampling and sampling
distribution . Understanding (Level2)
• Sampling Distributions: Concept and standard error.
• Hypothesis Testing: Formulation of hypothesis, procedure
of hypothesis testing, errors in testing of hypothesis, tests of
significance for large samples, tests of significance for small
samples, application of t-test, Z-test, F-test and Chi-square
test and Goodness of fit, ANOVA.
Techniques of association of attributes.
Unit-III
• CO3: Apply statistical methods for Hypothesis Testing.
Applying (level 3)
• Business Forecasting: Introduction, Role of forecasting
in business, Steps in forecasting and methods of
forecasting.
• Correlation: Partial and Multiple correlation.
• Regression Analysis: Multiple regression analysis,
Testing the assumptions of regression: multicolinearity,
heteroscedasticity and autocorrelation.
Unit IV
• CO5: Make use of Index Number method in managerial
decision making. Applying (Level 3)
• Index Number: Definition, importance of index number in
managerial decision making, methods of construction, tests
of consistency, base shifting, splicing and deflation,
problems in construction.
• Time Series Analysis: Meaning, component and, methods of
time series analysis. Trend analysis: Least square method,
linear and non linear equations, applications of time series
in business decision making.
Course Outcomes: Upon completion of this course, students will be able to:
SNO DESCRIPTION BLOOM’S TAXONOMY
LEVEL
CO1 Explain fundamental concepts of data collection, classification and tabulation Understanding
(Level 2)
CO2 Outline the concepts of sampling and sampling distribution Understanding
(Level 2)
CO3 Apply statistical methods for Hypothesis Testing .Applying
(level 3)
CO4 Illustrate the concept of multiple correlation and multiple regression in business Understanding
forecasting (Level 2)
CO5 Make use of Index Number method in managerial decision making Applying (Level 3)
CO6 Apply the time series method to predict the future of sales in a concern. Applying
(level 3)
Chandigarh Group of colleges,Jhanjeri
Unit-4
•CO4:-Illustrate the concept of multiple correlation and
multiple regression in business forecasting
•.
Partial Corrélation --Dr RAJINDER KAUR BHOGAL
Partial Correlation
• Partial correlation is the measure of association
between two variables while controlling or adjusting the
effect of one or more additional variables.
• Partial correlation is relationship between a dependent
variable and an independent variable exclusive of any
other independent variable that can have effect on value
of dependent variable.
Partial Correlation
• Zero order correlation:- Correlation between two
variables only r12,r13,r23.No variable are held constant.
(One is dependent and second is independent).
• First order Coefficient:- One variable has been held
constant r12.3,r13.2,r23.1,(One is dependent , second and
third are independent, last value -independent variable
is constant)
Partial Correlation
• Second order coefficients:-Two variable has been held
constant.r12.34,r13.24,r23.14(One is dependent , second
, third and fourth are independent, last value -
independent variable is constant).
Like r123 indicates that it is relationship between 1st and 2nd variable
keeping 3rd constant.
Problem 2
Problem 2
• The Simple Correlation Coefficient between x 1,x2,x3 are
given r12=0.59,r13=0.46,r23=0.77,compute (a) r12.3 (b)r23.1
(c)r13.2
• r12.3 =0.2358/square root of (0.7884*0.4071)=0.416
• (b)r23.1=0.4986/ square root of(0.6519*0.7884)=0.6954
• C). Answer=0.011
Problem
Problem 3
• The researcher is interested in computing the correlation
between anxiety and academic achievement controlled
from intelligence. Then correlation between academic
achievement (A) and anxiety (B) will be controlled
for Intelligence (C).
• This can be represented as: Academic Achievement(A)
Anxiety (B) . Intelligence (C) r . To calculate the partial
correlation (rP) we will need a data on all three
variables. The computational formula is as follows:
Solution
• The correlation between anxiety (B) and academic
achievement (A) is – 0.369.
• The correlation between intelligence (C) and academic
achievement (A) is 0.918.
• The correlation between anxiety (B) and intelligence
(C) is – 0.245.
• Give the correlations, we can now calculate the partial
correlation .
Partial Correlation
Problem 4
• On a Study of correlation on complexion between 10
pairs of hers(X1),mothers (X2),and daughter(X3),the
following zero order coefficients were observed:
• .r12=0.86,r13=0.65,r23=0.72
• Calculate the partial coefficient of correlation on
complexion between the mothers and daughters
eliminating the effect of hers.
• Compute:- r23.1 =
Solution
• Answer:-0.415
Conclusion
• Partial correlation is the measure of association
between two variables two variables while controlling or
adjusting the effect of one or more additional variables.
References/Text books
• Quantitative Techniques, by CR Kothari, Vikas
publication .
• Fundamentals of Statistics by SC Gupta Publisher Sultan
Chand .
• Quantitative Techniques in management by N.D. Vohra
Publisher: Tata McGraw hill.
• Business statistics T.R JAIN S.C AGGARWAL Global
Publication .
• Research Methodology CR Kothari
Websites
• http://www.ernestoamaral.com/docs/soci420-17fall/
Lecture24.pdf
Topic to be covered in the next
lecture
• Multiple correlation
Thank You
