Measures of Skewness

MEASURES OF
SKEWNESS
1
CHAPTER I
Overview of
Skewness
2
CHAPTER I
Overview of
Skewness
3
CHAPTER I
Overview of
Skewness
4
CHAPTER I
Overview of
Skewness
5
CHAPTER I
Overview of
Skewness
6
7
CHAPTER I
Overview of
Skewness
8
9
degree
peak bulginess
CHAPTER II
Kurtosis The peak is the tallest part of
the distribution and the tails
are the ends of the
distribution.
10
Difference between Skewness &
Kurtosis
Skewness Kurtosis
Skewness indicates lack of Kurtosis is a measure of the
symmetry in distribution. tailedness/peakedness of a distribution.
Positive skewness has a long-right Positive Kurtosis indicates more peakedness and
tail. has longer tails - Laptocurtic.
Negative skewness has a long-left Negative Kurtosis indicates less peakedness and
tail. has shorter tails - Platykurtic.
A symmetrical distribution has a When distribution has a normal curve, it

skewness of zero. indicates Mesokurtic distribution.
11
3 types of Symmetrical Curves
12
3 types of Symmetrical Curves
13
Grouped Ungrouped
•K = measure of kurtosis •K = measure of kurtosis

FORMULA •f =frequency •x =sample data
•x sub m =midpoint •x bar =mean
•x bar =mean •n =number of data in the sample
•n =number of data in the sample •s =sample standard deviation
•s =sample standard deviation
14
EXAMPLE
Situation: For 108 randomly selected Hogwarts students, the following iq
frequency distributions were obtained.
15
EXAMPLE
16
EXAMPLE
17
EXAMPLE
18
EXAMPLE
19
EXAMPLE
20
EXAMPLE
21
EXAMPLE
22
EXAMPLE
23
Computation
Grouped data
K= 1,868,346 / ((108)(9.07)^4) = 2.56

Hence, the given distribution is
platykurtic since K < 3
24
EXAMPLE
Situation: A sample of 5 students obtained the following
scores: 80, 88, 92, 90 and 85 with a mean of 87 and s=4.69.
25
Computation
Ungrouped data
K = 3124 / (5)(4.69)^4 = 1.29

Hence, the given distribution is platykurtic since K < 3.
26
Correlation
CHAPTER III
Correlation Correlation measures the strength and direction of the
relationship between two variables. It helps us
understand how changes in one variable are associated
with changes in another.
The value of correlation ranges from -1.00 to +1.00.
27
Pearson's correlation coefficient (r)
Most common correlation coefficient calculated as:
CHAPTER III
Correlation
x1 and y1 : individual data points for the two variables

–x and y– : means of two variables
28
Types of Correlation:
1. Positive Correlation
● Two variables are
positively correlated if
CHAPTER III they tend to increase or
Correlation decrease together.
● In this type, the
correlation coefficient r is
positive, with values closer
to 1.00 indicating a
stronger positive
relationship.
29
2. Negative Correlation
● Two variables are
negatively correlated if
CHAPTER III they tend to change in the
Correlation opposite direction.
● In this type, the
correlation coefficient r is
negative, with values
closer to -1.00 indicating a
stronger negative
relationship.
30
3. Zero Correlation
● Two variables are said to
be uncorrelated if they
CHAPTER III tend to change with no
Correlation connection to each other.
● The correlation coefficient
r is zero, suggesting no
linear relationship.
31
Sample Computation and Business Application
Sample data for a company with 5 ad campaigns with
corresponding costs and generated sales:
Ad Ad Spending Generated Sales

Campaigns in mm (X) in mm (Y)
CHAPTER III A 5 75
Correlation B 2 45
C 7 95
D 3 60
E 4 70
32
Sample Computation
Step 1: Calculate the means of X and Y
X Y
A 5 75
B 2 45
C 7 95
D 3 60
E 4 70
33
Sample Computation
Step 2: Calculate the numerator of the correlation
formula
X Y
A 5 75
B 2 45
C 7 95
D 3 60
E 4 70
Mean 4.2 69
34
Sample Computation
formula (141)
Step 3: Calculate the denominator of the correlation
formula X Y
A 5 75
B 2 45
C 7 95
D 3 60
E 4 70
Mean 4.2 69
35
Sample Computation
formula (141)
Step 3: Calculate the denominator of the correlation
formula (14.8 * 1,370) X Y
Step 4: Plug the values into the correlation formula A 5 75
B 2 45
C 7 95
D 3 60
E 4 70
Mean 4.2 69
36
Sample Computation
Interpretation
● The computed correlation
coefficient (r) of
CHAPTER III approximately 0.99
suggests a close to perfect
Correlation positive linear relationship
between ad spending and
generated sales.
● This indicates that as the
amount spent for ads
increases, the generated
sales also tends to rise.
37
Limitations of Pearson's r
● cannot distinguish between independent and
dependent variables (correlation does not imply
CHAPTER III causal relationship)
Correlation ● cannot capture nonlinear relationships
● influenced by outliers
38
CHAPTER IV
REGRESSION
by: Marianne V. Laylo
39
EXAMPLE OF REGRESSION IN LIFE
CHAPTER IV
REGRESSION
40
EXAMPLE OF REGRESSION IN ECONOMY:
The fluctuation in crude oil and gas prices affected by numerous
factors. Crude oil prices react to many variables, including supply
and demand prospects and the perceived risk of market
disruptions.
CHAPTER IV
REGRESSION
41
Linear Regression:
Equation: y = a + bx
CHAPTER IV
REGRESSION
42
CHAPTER IV
REGRESSION
43
Slope and Intercept of a Linear Equation
● Given a linear equation y = a + bx, we call b the slope, and a is
called the y-intercept.
CHAPTER IV
REGRESSION
(a) If b > 0, the line slopes upward to the right.
(b) If b = 0, the line is horizontal.
(c) If b < 0, the line slopes downward to the right.
44
Example:
A random sample of 11 statistics students produced the following data, where x is
the third exam score out of 80, and y is the final exam score out of 200. Using the
scatterplot, does it appear that we can predict the final exam score of a random
student if we know the third exam score?
CHAPTER IV
REGRESSION
45
Example:
Solution:
CHAPTER IV
REGRESSION
46
Example:
Solution:
CHAPTER IV
REGRESSION
47
-End of Chapter IV Regression-
CHAPTER IV
REGRESSION
48
CHAPTER V
Probability
Probability
By: Belinda B.
Is the result or outcome of
Palecpec a particular experiment or
activity.
49
Outcome – a result of an experiment
Experiment - is a planned operation
carried out under controlled conditions.
Terminologie
s: P- Probability
A and B – events
S – Sample space / Sequences
50
Two basic
1. Theoretical Probability
ways to
calculate 2. Empirical Probability
Probability
51
Suppose that all outcomes in the
sample space are equally likely.
Theoretical Formula:
Probability P(A) = number of outcomes in A
number of outcomes in S
52
Formula:
Conditional P (A/B) = number of outcomes in (A and B)
Probability number of outcomes in B
53
Independent or whether they are
Mutually Exclusive Events:
◦Independent Events: If the two events (A
and B) are independent if the knowledge that
Events in one occurred does not affect the probability
that the other occurs.
Probability Illustration:
P (A/B) = P (A)
P (B/A) = P(B)
P (A and B)= P (A) P(B)
54
Mutually ◦If the A and B events cannot occur at the
same time. This means that A and B do not
Exclusive
share any outcomes and so it follows that P
Events (A and B) =0
55
1. Addition Rule
◦If the events A and B are defined on the
same sample space.
P (A or B) = P(A)+P(B) – P(A and B)
Rules of 2. Multiplication Rule
Probability -The probability of A and B equals the
probability of A and B divided by the
probability of B.
P (A/B)=P(A and B)
P(B)
56
Other type
of graphs to 1.Tree Diagram
determine
the 2.Venn Diagram
outcomes/pr
obabilities
57
Tree
Diagram
58
Venn
Diagram
59

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MEASURES OF

A symmetrical distribution has a When distribution has a normal curve, it

•K = measure of kurtosis •K = measure of kurtosis

K= 1,868,346 / ((108)(9.07)^4) = 2.56

K = 3124 / (5)(4.69)^4 = 1.29

x1 and y1 : individual data points for the two variables

Ad Ad Spending Generated Sales

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