2017
DOI: 10.12973/ijem.3.2.75
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Application of Principal Component Analysis (PCA) to Reduce Multicollinearity Exchange Rate Currency of Some Countries in Asia Period 2004-2014

Abstract: Abstract:This study aims to apply the model Principal component Analysis to reduce multicollinearity on variable currency exchange rate in eight countries in Asia against US Dollar including the Yen (Japan), Won (South Korea), Dollar (Hongkong), Yuan (China), Bath (Thailand), Rupiah (Indonesia), Ringgit (Malaysia), Dollar (Singapore). It looks at yield levels of multicolinierity which is smaller in comparison with PCA applications using multiple regression. This study used multiple regression test and PCA appl… Show more

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Cited by 18 publications
(5 citation statements)
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“…The PCA technique eliminated the multicollinearity within the dataset. PCA is one of the most common ways to reduce multicollinearity in the dataset which has been reported by multiple authors (Rahayu et al, 2017;Pinto et al, 2006). Our results suggest that PCA allowed for a better understanding of the complex correlations among the traits while ensuring that the number of traits was reduced which was also suggested by Pinto et al (2006).…”
Section: Datasetssupporting
confidence: 65%
“…The PCA technique eliminated the multicollinearity within the dataset. PCA is one of the most common ways to reduce multicollinearity in the dataset which has been reported by multiple authors (Rahayu et al, 2017;Pinto et al, 2006). Our results suggest that PCA allowed for a better understanding of the complex correlations among the traits while ensuring that the number of traits was reduced which was also suggested by Pinto et al (2006).…”
Section: Datasetssupporting
confidence: 65%
“…Our results also indicate that PCA eliminated all multicollinearity in the dataset. This has also been established in literature by several authors 9 , 10 . PCA the present study was useful in allowing for a better understanding of the correlations among the traits at the same time, ensuring that feature reduction was achieved as was also stated by 9 .…”
Section: Discussionsupporting
confidence: 75%
“…ation factor, we infer that PCA indeed eliminated all multicollinearity. This has also been published by multiple authors(Pinto et al, 2006;Rahayu et al, 2017). PCA, in our study, allowed a better understanding of the correlations among the traits at the same time, ensuring that feature reduction was achieved as was also stated byPinto et al (2006).A correlation coe cient of 0.658 was reported bySolberg et al (2009) for the model to predict breeding values between true breeding values using PCR which is lower than the result of 0.746 as reported by us Du et al (2018).…”
supporting
confidence: 64%