Spearman's Correlation Coefficient Analysis

The assignment involves calculating Spearman's correlation coefficient to determine the relationship between software rating and annual stock performance ranking. It also includes testing the significance of this relationship across all stocks in the market using a null and alternative hypothesis. The analysis reveals a positive relationship between the variables but with no significant association when considering all stocks in the market.

Quantitative Methods

TABLE OF CONTENTS
SECTION A.....................................................................................................................................1
A. Graphical presentation............................................................................................................1
B. Assessing the extent to which product recall varies across the infomercials..........................2
C. Summarizing calculation of ANOVA table............................................................................3
QUESTION 2..................................................................................................................................5
A. Calculating Spearman's correlation coefficient......................................................................5
B. Interpretation...........................................................................................................................6
C. Testing significance level by considering the aspect ‘across all stocks in the market’..........6

SECTION A
ANOVA
A. Graphical presentation
Means Plots
Means Plots

B. Assessing the extent to which product recall varies across the infomercials
Hypothesis 1:
H0 (Null hypothesis): There is no significant difference in the mean values of spokesperson and
demonstration.
H1 (Alternative hypothesis): There is a significant difference in the mean values of
spokesperson and demonstration.
Interpretation: In the case of hypothesis 1, P>0.05, so it can be presented that null
hypothesis is true (Cronk, 2016).
Hypothesis 2:

H0 (Null hypothesis): There is no significant difference in the mean values of spokeperson and
testimonial.
H1 (Alternative hypothesis): There is a significant difference in the mean values of spokeperson
and testimonial.
By applying ANOVA tool, it has been assessed that p>0.05 which in turn shows the
rejection of alternative hypothesis.
C. Summarizing calculation of ANOVA table
Hypothesis 1:
Descriptive
DEMONSTRATION
N Mean Std.
Deviation
Std.
Error
95% Confidence
Interval for Mean
Minimum Maximum
Lower
Bound
Upper
Bound
29.00 1 70.0000 . . . . 70.00 70.00
37.00 1 75.0000 . . . . 75.00 75.00
45.00 2 59.5000 14.84924 10.50000 -73.9151 192.9151 49.00 70.00
47.00 1 51.0000 . . . . 51.00 51.00
48.00 1 57.0000 . . . . 57.00 57.00
49.00 2 73.5000 2.12132 1.50000 54.4407 92.5593 72.00 75.00
51.00 1 54.0000 . . . . 54.00 54.00
64.00 1 68.0000 . . . . 68.00 68.00
66.00 1 74.0000 . . . . 74.00 74.00
68.00 1 58.0000 . . . . 58.00 58.00
Total 12 64.4167 9.86692 2.84833 58.1475 70.6858 49.00 75.00
ANOVA
DEMONSTRATION
Sum of
Squares
df Mean Square F Sig.
Between Groups 845.917 9 93.991 .835 .654
Within Groups 225.000 2 112.500
Total 1070.917 11

Hypothesis 2:
One-way
Descriptive
Testimonial
N Mean Std.
Deviation
Std.
Error
95% Confidence
Interval for Mean
Minimum Maximum
Lower
Bound
Upper
Bound
29.00 1 64.0000 . . . . 64.00 64.00
37.00 1 71.0000 . . . . 71.00 71.00
45.00 2 60.5000 2.12132 1.50000 41.4407 79.5593 59.00 62.00
47.00 1 64.0000 . . . . 64.00 64.00
48.00 1 55.0000 . . . . 55.00 55.00
49.00 2 51.0000 7.07107 5.00000 -12.5310 114.5310 46.00 56.00
51.00 1 48.0000 . . . . 48.00 48.00
64.00 1 72.0000 . . . . 72.00 72.00
66.00 1 48.0000 . . . . 48.00 48.00
68.00 1 73.0000 . . . . 73.00 73.00
Total 12 59.8333 9.51395 2.74644 53.7885 65.8782 46.00 73.00
ANOVA
Testimonial
Sum of
Squares
df Mean Square F Sig.
Between Groups 941.167 9 104.574 3.838 .224
Within Groups 54.500 2 27.250
Total 995.667 11
Interpretation: The above depicted tables pertaining to hypothesis 1 and 2 shows that
p>0.05 which clearly exhibits that null hypothesis is accepted. Hence, by taking into account the
outcome of evaluation it can be presented that mean values of testimonial do not differs from
spokesperson. Further, assessed outcome shows in relation to hypothesis 2 exhibits that there is
no statistical difference in the mean values of spokesperson and testimonial.

QUESTION 2
A. Calculating Spearman's correlation coefficient
Correlation
STOCK Actual stock
performance ranking
Software rating d d^2
JKZ 3 1 2 4
MPO 6 4 2 4
LLU 1 2 -1 1
RYD 4 7 -3 9
BOB 5 6 -1 1
SEN 7 3 4 16
PAT 8 5 3 9
ZTE 2 2 0 0
ALK 9 6 3 9
IJF 9 7 2 4
Total (D^2) 57
P = 1 - ∑d^2 / n (n^2 – 1)
P = 1 – 6 * 54 / 10 (10^2 - 1)
P = 1 – 324 / 990
P = 1 - 0.33
P = 0.67
B. Interpretation
By applying Spearman’s correlation test, it has been found that positive relationship such
as .67 takes place between software rating and annual stock performance ranking. In accordance
with such aspect, if software rating will increase then their annual stock performance ranking
also inclines or move in similar direction. Thus, due to having positive and higher relationship

both the variables assessed will move in same direction. Hence, it can be depicted that software
rating system offers value to the day trader.
C. Testing significance level by considering the aspect ‘across all stocks in the market’
H0 (Null hypothesis): There is no significant relationship takes place between ranking from the
software and actual performance of stock in relation to across all stock in the market.
H1 (Alternative hypothesis): There is a significant relationship takes place between ranking
from the software and actual performance of stock in relation to across all stock in the market.
Outcome of statistical evaluation shows that P value is 0.67 which is higher than the
standard value such as 0.05. It shows that null hypothesis is true and other one considered as
false. By considering this, it can be presented that there is no significant association between
software ranking and annual performance ranking while considering the all stocks in market.
Further, it has been identified that findings presented here do not support initial assessment
performed in part (b). Moreover, on the basis of initial assessment both the variables having
positive relationship with each other. On the other side, P value entails that alternative hypothesis
is false. Hence, by taking into account such aspect it can be stated that stock performance and
software ranking are related with each other but not across all the stocks. Moreover, some stocks
demand for wide evaluation rather than just depending on rating. On the basis of cited case
situation, stock performance ranking of MPO, LLU and RYD is lower than software rating.
Except such 3 stocks, in the case of others movement of both the variables was in same direction.
Thus, from overall evaluation, it can be said that across all stocks no significant relationship
exists between the variables assessed.

REFERENCES
Books and Journals
Cronk, B. C., 2016. How to use SPSS®: A step-by-step guide to analysis and interpretation.
Routledge.