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Trend Analysis (Least Square Method)

The document discusses analyzing the correlation between savings deposits and total deposits. It finds a correlation coefficient of -0.457, indicating a high positive correlation where increasing savings also increases total deposits. It then performs a statistical test and finds the correlation is greater than 6 times the probable error, showing a highly significant relationship between the two variables. It also introduces the least squares method for trend analysis to describe how variables change over time.

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142 views1 page

Trend Analysis (Least Square Method)

The document discusses analyzing the correlation between savings deposits and total deposits. It finds a correlation coefficient of -0.457, indicating a high positive correlation where increasing savings also increases total deposits. It then performs a statistical test and finds the correlation is greater than 6 times the probable error, showing a highly significant relationship between the two variables. It also introduces the least squares method for trend analysis to describe how variables change over time.

Uploaded by

The onion factory
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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27

= - 6149
13434.29
= -0.457

Since r= - 0.457
From the above table the coefficient of correlation of correlation r=+36.82. It
indicates that the degree of positive correlation between savings and total deposit is
high. It can be consider as high correlation. It shows that if the amount of saving
deposit increases the amount of the total deposit also increases according.

PE = 0.6745 × 1-r2
√n
= 0.6745 ×1-1322.04
√4
= 891, 04
2
= 445.52
PE ×6 = 0.636
Since, r>6PE

The test shows that the correlation coefficient is greater than 6 times of its. It shows
that there is highly significant relation exist savings deposit and total deposit.

Trend Analysis (Least Square Method)


The statistical tool used in this study is least square method, which is used to describe
the trend of any variables whether in increase or decrease with the passage of time.
The formula of least square method is

Yc = a + bx
∑x
Where, a =
N
∑ xy
b=
∑ x2

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