Multivariate Analysis - Essay Example

The huge capacity of research in the field of modeling of the real world processes along with handling of several input and output variables is obvious. All these situations can be considered as multivariate due to the presence of multiple variables. Multivariate Analysis: Multivariate analysis techniques identify the relationship patterns among a number of variables at one time. Multivariate analysis techniques are generally used for, Development of classification systems. Enquiring ways to group and use data items.

Generation and testing of hypothesis. Selected Papers The research papers selected for the study are listed as follows, 1. A Study of Diversification in banking sector with special reference to Finance, by Yaseen Ahmed Meenai, IBA, Karachi, Pakistan. 2. Performance measurement by Data Envelopment Analysis (DEA): A study of banking sector in Pakistan by Sultan Jahanzaib, Bilal Muhammad, Zaheer Abbas. International Islamic University, Islamabad, Pakistan. 3. The Comparison of Principal Component Analysis and Data Envelopment Analysis in Ranking of Decision, by Filiz KARDYEN and H.

Hasan ORKCU, Turkey. The sources of these research papers are indicated in the references. The rationale of selection: Keeping in mind the major field of study as ‘finance’, these papers are selected to study the application of multiple multivariate analysis techniques in the field. Following paper wise description clarifies the selection criteria to a better extent. Research paper 1, discusses the growth of consumer financing in Pakistan during the early years of the first decade of this century.

The purpose is served through the selection and study of the data generated by ten financial institutions in this era. To support the hypothetical claim of a boom in performance during this period, two multivariate analysis techniques namely Profile Analysis and Correspondence Analysis are used. The second research paper is also related to the banking sector in Pakistan. The relevance with the field of finance becomes the main reason for the selection of this paper as well. The added reasons are that the paper exhibits the application of a unique non statistical multivariate technique namely Data Envelopment Analysis.

This technique is used to comment on the efficiency and effectiveness of the DMUs (banks). The hypothesis presented claims no correlation between efficiency and effectiveness. The result of analysis supports the hypothesis. Research paper 3 is selected mainly to enhance the knowledge of multivariate techniques studied and learnt in this research so far. This paper is taken as an extension to the previous one as it compares the Data Envelopment Analysis with a purely statistical multivariate analysis technique namely Principle Component Analysis.

The case study (a bit financial) and data selected for the comparison is related to the ranking of multiple European Union Countries in terms of economy. The paper stands out as it proves that PCA could be used instead of DEA for ranking the DMUs (counties in this case) as effectively as DEA. The paper highlights the procedural differences of both the techniques as well. The Techniques: Profile Analysis This technique takes the data in tabular manner to consider the row wise or column wise profiles.

The visualization of data through profile analysis enhances the understanding of data. The factors like relative inclination or decline and percentage