SE-705

Simulation and Modeling

Presented By:
Syed Salman Haider Gilani
2018-AG-4511
Saif
2015-AG-2678
She Afgun
2016-AG-3322
Presented To:
Sir Azam Zia
 Objectives
 Mean
 Standard Derivation
 Variance
 Median
 Regression
 Correlation
 Skewness
 Graphs
 Mean
Mean can prove to be an effective tool when
comparing different sets of data; however this method
might be disadvantaged by the impact of extreme
values.
If a dataset contains one or two very high or very low values
the mean will be less typical as it will be adversely influenced
by these exceptional value(s). This can be seen in table,
where the mean salary of 6 graduates who responded to a
survey about salaries in their first jobs is calculated to be
£23,995 (£143,970 divided by 6).
 Median
 The median is a good measure of the average value
when the data include exceptionally high or low values
because these have little influence on the outcome.
 The median is the most suitable measure of average for
data classified on an ordinal scale.
 The median is also easy to calculate but this does not
imply that it is an inferior measure to the mean – what
is important is to use an appropriate measure to
determine the average.
Another area where the median is useful is with
frequency data. Frequency data give the numbers of
people or things in particular categories. For example,
the frequency distribution of shoe sizes for a sample of
21 women was collected and is summarised in table.
 Variance
 In probability theory and statistics, variance is the
expectation of the squared deviation of a random
variable from its mean. Informally, it measures how far
a set of (random) numbers are spread out from their
average value. ... Variance is an important tool in the
sciences, where statistical analysis of data is common.

 Let's consider a hypothetical investing example:

Returns for a stock are 10% in Year 1, 20% in Year 2, and
-15% in Year 3. The average of these three returns is 5%.
The differences between each return and the average
are 5%, 15%, and -20% for each consecutive year.
 The advantage of variance is that it treats all
deviations from the mean the same regardless of their
direction. The squared deviations cannot sum to zero
and give the appearance of no variability at all in the
data.
 A large variance indicates that numbers in the set are
far from the mean and from each other, while a small
variance indicates the opposite.
 Variance can be negative. A variance value of zero
indicates that all values within a set of numbers are
identical.
 All variances that are not zero will be positive
numbers.
 Standard Deviation
 Standard deviation is the measure of spread most
commonly used in statistical practice when the mean
is used to calculate central tendency. Thus, it
measures spread around the mean.
 In probability theory and statistics, variance is the
expectation of the squared deviation of a random
variable from its mean. Informally, it measures how far
a set of (random) numbers are spread out from their
average value.
 Regression

 Simple regression is used to examine the

relationship between one dependent and one
independent variable. After performing an analysis,
the regression statistics can be used to predict the
dependent variable when the independent
variable is known.
For example, a medical researcher might want to use
body weight (independent variable) to predict the
most appropriate dose for a new drug (dependent
variable). The purpose of running the regression is to
find a formula that fits the relationship between the
two variables. Then you can use that formula to predict
values for the dependent variable when only the
independent variable is known. A doctor could
prescribe the proper dose based on a person's body
weight.
 Correlation
 Correlation is used to test relationships between
quantitative variables or categorical variables. In other
words, it's a measure of how things are related. The study
of how variables are correlated
is called correlation analysis.

Examples
 Your eye color and your relatives’ eye colors.
 The amount of time your study and your GPA.
 Correlation can tell you just how much of the variation in
peoples' weights is related to their heights.
 Skewness
 Skewness in statistics represents an imbalance and
an asymmetry from the mean of a data distribution. ...
In a skewed data distribution, the median and the
mean are different values. A positive skew means that
the extreme data results are larger, bringing the
average up and making it larger than the median.
 Applications of Skewed Data

Skewed data arises quite naturally in various situations.

Incomes are skewed to the right because even just a few
individuals who earn millions of dollars can greatly affect
the mean, and there are no negative incomes. Similarly,
data involving the lifetime of a product, such as a brand
of light bulb, are skewed to the right. Here the smallest
that a lifetime can be is zero, and long lasting light bulbs
will impart a positive skewness to the data.
 If the skewness is between -0.5 and 0.5, the data are
fairly symmetrical.
 If the skewness is between -1 and -0.5(negatively
skewed) or between 0.5 and 1(positively skewed), the
data are moderately skewed.
 If the skewness is less than -1(negatively skewed) or
greater than 1(positively skewed), the data are highly
skewed.
 Graphs

Good graphs convey information quickly and easily to

the user. Graphs highlight the salient features of the
data. They can show relationships that are not obvious
from studying a list of numbers. They can also provide
a convenient way to compare different sets of data.
 Refferences
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df
Thanks