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Association between nominal and continuous variables

  1. Apr 17, 2012 #1
    Suppose you have two random samples of the profit margins obtained by two
    stock traders, Trader A and Trader B. The first data set consists of 18
    data, and the second has 21.

    I want to check if there is association between the variables
    "type of trader" (values A or B) and "profit margin". In words,
    I need to find out if the choice of trader influences the profit
    margin obtained.

    Since the observations are not paired and, after all,
    the numbers of observations are distinct, I cannot use
    the linear correlation coefficient formula.

    I know there is a formula to verify if a nominal (discrete)
    variable and a continuous varible are associated. I also
    know it involves the means and standard deviations of
    both data sets. I have been told, too, that it gives a result
    ranging from 0 to 1 and that, the closer it is to 1, the stroger
    is the association.

    The trouble is I missed the class about the formula
    and it has proven really hard to find it on the web, since
    I don't know its name. So I would really appreciate if you guys
    could write it down for me. I need it as soon as possible and
    I can't ask my teacher right now; so I really need your help.

    If the data sets are needed, I can provide them. But I don't think
    they're necessary, now that it's only the formula what I need. I
    already know how to solve the problem.

    Thanks in advance,
    hellofolks.
     
  2. jcsd
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