Principal components are combinations of observed variables such as revenue from prescription drugs or from OTC pain medications.
- [Instructor] The information I presented…so far is all fairly abstract…so let's take a closer look at…actually running a principal components analysis…and examining its results.…I'm going to open the Excel file named Factor.xlsm,…and then I'm going to open the Excel…file named Product Sales.xlsx.…It's important to open files in that specific order.…The Excel file named Factor.xlsm contains…code that runs the principal components analysis…Let's take a look at how it works.…
I click the Principal Components item on the Add-ins tab,…and in the Input Range edit box,…I enter the range address of the product sales…including the header row with the variable names in it.…Because I have variable labels in the first row,…I fill the appropriate checkbox.…In many cases it's useful to include Record IDs,…but at this exploratory stage it's not.…I'm using raw data rather than a correlation matrix…as the form of the input,…so I click the Raw Data option button.…
Now I click the Rotation tab on the dialog box,…and select the Varimax method.…
In this course, Conrad Carlberg explains how to carry out cluster analysis and principal components analysis using Microsoft Excel, which tends to show more clearly what's going on in the analysis. Then he explains how to carry out the same analysis using R, the open-source statistical computing software, which is faster and richer in analysis options than Excel. Plus, he walks through how to merge the results of cluster analysis and factor analysis to help you break down a few underlying factors according to individuals' membership in just a few clusters.
- Reviewing the problems created by an overabundance of data
- Understanding the rationale for clustering and principal components analysis
- Using Excel to extract principal components
- Using R to extract principal components
- Using R for cluster analysis
- Using Excel for cluster analysis
- Setting up confusion tables in Excel
- Using cluster analysis and factor analysis in concert