Weighted mean :
The weighted mean is a type of mean that is calculated by
multiplying the weight (or probability) associated with a particular
event or outcome with its associated quantitative outcome and
then summing all the products together.
• Common applications include calculating GPA, weighted
averages for investment recommendations, and summarizing
grouped
Example 1
Approximate mean and variance of grouped data
• Grouped data doesn't have exact values, so we use midpoints
for each category to estimate the mean and variance.
• This is often applied when working with large datasets or
surveys where individual data points aren't available.
INTRODUCTION OF MEASURES OF RELATIONSHIPS
BETWEEN VARIABLES-
Today, we’re going to explore how to measure relationships
between two variables. We’ll discuss two main concepts:
covariance and correlation coefficient. Both are useful tools to see
how one variable influences another.
What is Covariance?
Covariance tells us whether two variables move together. If they
both increase or decrease together, we have positive covariance.
If one increases while the other decreases, we have negative
covariance. However, it doesn’t tell us the strength of the
relationship.
FORMULA
Correlation Coefficient:
While covariance tells us the direction, the correlation coefficient
gives us both the direction and strength of the relationship. A
value of 1 means that as one variable increases, the other
increases in perfect unison. A value of -1 means that as one
increases, the other decreases in perfect unison
FORMULA
SCATTER PLOTS AND CORRELATION
Scatter plots give us a visual representation of how two variables
are related. The closer the points are to forming a straight line,
the stronger the relationship. If the line goes up, the correlation is
positive. If it slopes down, it’s negative. No pattern means no
correlation.
Covariance in the Plot
- Covariance helps us see if two variables (Facebook posts and fan
interactions) move together.
- If more Facebook posts mean more fan interactions, we say
they have a positive covariance.
- If more Facebook posts led to fewer fan interactions, it would
be negative covariance.
In the scatter plot, as the number of Facebook posts increases (on
the x-axis), the number of fan interactions also increases (on the
y-axis). This means **positive covariance** because both
variables are moving in the same direction.
Correlation in the Plot
- Correlation not only tells us if two variables move together, like
covariance, but it also tells us how strong that relationship is.
- A strong correlation means the points are very close to
forming a straight line.
- A weak correlation means the points are scattered and less
consistent.
In this scatter plot:
- The points generally form an upward pattern. This shows a
positive correlation, meaning that more posts lead to more
interactions.
- The points are not exactly forming a perfect straight line
but are pretty close, which means there is a moderately
strong positive correlation.
This plot visually demonstrates both positive covariance and
positive correlation between the number of Facebook posts and
fan interactions.