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Application of Pearson Correlation and Partial Correlation
Application of Pearson Correlation and Partial Correlation
Group No: 07
Year IV semester I
Department of Business Management
Sabaragamuwa University of Sri Lanka
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Acknowledgment
The success and final out come of this assignment required a lot of guidance and
assistant from many people and extremely fortunate to have got this all along the
completion of our assignment work. Whatever we have done is only due to such
guidance and assistant and we would like to show our gratitude them. We respect and
thank Ms.A.C. Jayathilake for giving us and opportunity do this assignment work and
providing us all support which made us complete the assignment on time also respects
Finally, researchers want to give their heartfelt thanks to all other parties who
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Abstract
This report indicates the application of Pearson Correlation on the product packaging
district and the Partial Correlation on factors influencing on foreign direct investment
inflows in Sri Lanka according to the Central Bank report. The researcher used
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Contents
Introduction.............................................................................................................................5
Simple Correlation (r)...........................................................................................................6
Partial correlation.................................................................................................................6
Pearson’s Correlation...............................................................................................................6
Methodology........................................................................................................................6
Conceptual Framework.........................................................................................................7
Independent Variables..........................................................................................................7
Objectives.............................................................................................................................8
Hypothesis............................................................................................................................8
Conclusion..........................................................................................................................12
Partial Correlation..................................................................................................................13
Methodology......................................................................................................................13
Conceptual Framework.......................................................................................................13
Objectives...........................................................................................................................13
Hypothesis..........................................................................................................................13
Conclusion..............................................................................................................................16
Appendix.................................................................................................................................17
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Introduction
The purpose of correlation analysis is to measure and interpret the strength of a linear
Through the correlation analysis, you evaluate correlation coefficient that tells you
how much one variable change when the other one does. Correlation analysis
provides you with a linear relationship between two variables. Karl Pearson’s
variables.
Throughout this report we tried to study on Karl Pearson’s Correlation and Partial
Correlation.
0, it means there are positive association between those two variables. If it gets less
Partial correlation
Partial correlation answers the question ‘what the correlation coefficient between any
two variables with the effects of a third variable is held constant?’ [ CITATION Bra05 \l
1033 ]. Therefore, Partial rank correlation (PRC) computes correlation between two
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Pearson’s Correlation
Methodology
The population of this study was customer who purchased from supermarket in
Colombo district. Researcher considered 384 customers as the sample size to conduct
the study by using simple random sampling in order to generalize the finding in the
particular sector.
Researcher collected the data from survey by including six demographic questions
and 20 items. There were 4 items for color used in packaging, 4 items for material
used in packaging, 3 items for design of the wrapper, 4 items for innovation of the
included 5 items. The researcher used SPSS software to analyze the data
Conceptual Framework
Material uses in
packaging Purchasing intention on
packaging
Innovation of the
packaging
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Independent Variables
Color using packaging
process; certain colors set different moods and can help to draw attention
Consumer can change its decision regarding Packaging material. High quality
The overall design also plays a vital role in attracting the consumer. The
Ahm14 \l 1033 ].
Ahm14 \l 1033 ].
Dependent Variable
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Objectives
1. To find out whether there is an association between color used in packaging and
Colombo district.
Hypothesis
1. Ho: There is no association between color used in packaging and purchasing
packaging
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2.To find out whether there is an association between material used in packaging and
Packaging
According to the Table 2, the P value (0.000) is less than critical P value (0.05), there
are enough evidence to reject H0 (H0: There is no association between material used in
material used in packaging. And the r value is 0.488, there is law degree of positive
packaging.
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3. To identify whether there is a positive association between design of the wrapper
Colombo district.
H1: There is a positive association between design of the wrapper and purchasing
According to Table 3, the P value (0.000) is less than critical P value (0.05), there are
in Colombo district, H1: There is a positive association between design of the wrapper
packaging. And the r value is 0.410, there is law degree of positive correlation
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4. To find out whether there is a positive association between innovation of the
Colombo district.
of Packaging
According to Table 4, the P value (0.000) is less than critical P value (0.05), there are
packaging and innovation of the packaging. And the r value is -0.195, there is law
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degree of negative correlation between purchasing intention of packaging and
Conclusion
Researcher studied, the association between four independent variables and one
dependent variable. Among those variables, two non-directional hypotheses and two
data, color used in packaging and material used in packaging (independent variables)
had association bet ween purchasing intention of packaging (dependent variable) and
there is a law degree of positive correlation. The association between design of the
wrapper and purchasing intention of packaging had law degree of positive correlation
and innovation of packaging and purchasing intention of packaging had law degree of
negative correlation.
Partial Correlation
Methodology
The study had been selected for the period of last five years from 1977 to 2017 past
Lanka[ CITATION Cen17 \l 1033 ]. The population was 41 years data values. The
Conceptual Framework
Independent Variables Dependent Variable
Exchange Rate
Trade Openness
Foreign Direct Investment
Inflation
GDP
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Objectives
1. To find out whether there is association between foreign direct investment a gross
Hypothesis
1. H0: There is no association between foreign direct investment and gross domestic
H1: there is association between foreign direct investment and gross domestic
Table 5: The association between gross domestic product and foreign direct
P Value 0.161
Source: The Annual Report of the Central Bank of Sri Lanka
According to Table 5, the P value (0.161) is greater than critical P value (0.05), there
are not enough evidence to reject H0 (H0: There is no association between foreign
there is association between foreign direct investment and gross domestic product by
between gross domestic product and foreign direct investment by keeping constant of
inflation. And the r value is 0.226, there is law degree of positive correlation between
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2. To find out whether there is association between foreign direct investment and
2. H0: There is no association between foreign direct investment and trade openness
H1: There is an association between foreign direct investment and trade openness
Table 6: The association between foreign direct investment and trade openness
P Value 0.008
According to Table 6, the P value (0.008) is less than critical P value (0.05), there are
investment and trade openness by keeping constant of exchange rate, H1: there is
association between foreign direct investment and trade openness by keeping constant
of exchange rate)
between trade openness and foreign direct investment by keeping constant exchange
rate. And the r value is - 0.413, there is law degree of negative correlation between
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3. To find out whether there is association between foreign direct investment and
H1: There is association between foreign direct investment and exchange rate
P Value 0.000
Table 7: the association between foreign direct investment and exchange rate by
According to Table 7, the P value (0.000) is less than critical P value (0.05), there
direct investment and exchange rate by controlling the effect of inflation, H1:
the effect of inflation. And the r value is 0.862, there is high degree of positive
Conclusion
Researcher examined to identify association between four independent variables and
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direct investment and gross domestic product by controlling the effect of inflation.
The association between foreign direct investment and trade openness by keeping
control exchange rate had law degree of negative correlation. And also, the
association between foreign direct investment and exchange rate by controlling the
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Appendix
Appendix A Association between dependent variable and independent variables
Correlations
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Correlations
df 0 39 39
df 39 0 39
df 39 39 0
Correlation 1.000 .226
df 0 38
Inflationrate
Correlation .226 1.000
df 38 0
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Appendix C Association between exchange rate and FDI by keeping the effect of
inflation rate
df 0 39 39
df 39 0 39
df 39 39 0
Correlation 1.000 .862
df 0 38
Inflationrate
Correlation .862 1.000
df 38 0
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Appendix D Association between FDI and Trade Openness by keeping constant of
Exchange rate
Correlations
df 39 39 0
E Correlation 1.000 -.413
xFDI Significance (2-tailed) . .008
c df 0 38
h
Correlation -.413 1.000
a
Significance (2-tailed) .008 .
n
38 0
g
eTradeopnnessrate
r
df
a
t
e
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