Transcript Measures of Association

Time
Eruption
Waiting time
Eruption
Short wait
Long wait
Short eruption
Long eruption
Long eruption, long wait
Short eruption, short wait
Conclusion:
The longer the eruption, the longer the wait
for the next one
Carbon dioxide concentration is related to the Earth temperature
Carbon Dioxide
CO2
Temperature
http://www.worldviewofglobalwarming.org
Carbon dioxide concentration is related to the Earth temperature
http://www.seed.slb.com
Possible solution:
Control CO2 to affect temperature
http://www.greendiary.com
?
Each asset can be described by the (possible)
distribution of future values.
Asset A
Asset B
Portfolio (A+B)
Some processes (and random variables) are connected
We can measure (or control) one process to predict
(or control) another
Thus, we need to
a) manipulate with several random variables
b) establish connections among random variables
Data set “Davis” from package R
140
160
Height vs Weight for women
100
80
60
40
Weight, kg
120
Outlier
60
80
100
120
Height, cm
140
160
180
Data set “Davis” from package R
140
160
Height vs Weight for women
100
Pearson’s r = -0.59
60
80
Spearman’s r = 0.49
40
Weight, kg
120
Kendall’s t = 0.36
60
80
100
120
Height, cm
140
160
180
Old Faithful geyser data
Kendall’s t = 0.57
Pearson’s r = 0.9
Spearman’s r = 0.78
100
Non-monotone trend
60
80
Kendall’s t = 0.01
40
Y
Pearson’s r = 0.01
0
20
Spearman’s r = 0.01
-10
-5
0
X
5
10