Correlation Analysis is a well-known analytical technique used to test if there is a relation between two quantities, for example did a marketing campaign lead to an increase in sales or as the price of one stock rises and falls does the price of another stock also rise or fall in synch.
Determining if there is a correlation can be exploited:
a marketing campaign that isn’t impacting sales can be cancelled to save costs or if it is successful it can then be extended or
ensuring that a portfolio has good diversity so that if one investment suddenly drops it is less likely that all other investments will also drop.
The aim of this article is to review what correlation analysis is and then use a worked example to understand how to implement correlation analysis using SAP Business Objects Web Intelligence.
A key part of our work in Business Intelligence is the analysis of data and the branch of mathematics that we employ for this is statistics.
We analyse data to understand our business better and when analysing the data our main objective is to pick out the reality from the background noise. For example when looking at weekly sales figures we see that the number of items sold varies from week to week, some weeks more, some weeks less. The challenge is to understand whether this change is just chance or there is something driving the change – a marketing campaign, or favourable comments on social networks.
By understanding our business better we can make decisions to improve our business, for example, if we can prove that a marketing campaign is not making any difference then we can save some money but cancelling the campaign. But being able to “prove” that a campaign is, or is not, making a difference we need to use statistics.
Recently Nathan Green started a new series of articles on statistics in the UK’s Guardian newspaper. So far I have found these articles to be very well written and provide a good introduction to statistical analysis, providing clear explanations for tricky concepts such as the difference between mean, median and mode and what is a p-value by using every day examples.
These articles are looking like a great way to get started with understanding statistics and so I would recommend you check them out. And if you already are adept with statistics then these still provide a good source of interesting material!
A moving average is a simple technique for smoothing random data. Most often we find moving averages to analyse movement of stock prices but we also see them in other areas of business and data analysis.
This is the first part of a series of two articles. This article discusses what are moving averages and how they are calculated. The second part then looks at how to implement moving average calculations in SAP BusinessObjects Web Intelligence.
If you already understand moving averages you can skip to the second article on how to implement in Web Intelligence.
The previous article looked at what moving averages are and how to calculate them. This article now looks at how to implement these in Web Intelligence.
The formula used here are compatible with the XIr3 version of SAP BOE however some formula may work in previous versions if available. We’ll begin by looking at how to calculate a simple moving average before looking at weighted and exponential forms.