Session 12_Corr&Regression Analysis.pptx

# Session 12_Corr&Regression Analysis.pptx - CORRELATION...

• 31

This preview shows page 1 - 10 out of 31 pages.

CORRELATION ANALYSIS

Subscribe to view the full document.

Summarizing Bivariate Data (Two Variables) Using Graphical Displays In most cases, a graphical display is more useful than a table for recognizing patterns and trends. Scatter diagrams and trend lines are useful in exploring the relationship between two variables. Scatter diagram It is a graphical presentation of the relationship between two quantitative variables One variable is shown on the horizontal axis and the other variable is shown on the vertical axis. The general pattern of the plotted points suggests the overall relationship between the variables. A trend line provides an approximation of the relationship.
Scatter Diagram A Positive Relationship x y

Subscribe to view the full document.

Scatter Diagram A Negative Relationship x y
Scatter Diagram No Apparent Relationship x y

Subscribe to view the full document.

Example: Panthers Football Team 1 3 2 1 3 14 24 18 17 30 x = Number of Interceptions y = Number of Points Scored Scatter Diagram The Panthers football team is interested in investigating the relationship, if any, between interceptions made and points scored.
Scatter Diagram and Trend line y x Number of Interceptions Number of Points Scored 5 10 15 20 25 30 0 35 1 2 3 0 4

Subscribe to view the full document.

Insights Gained from the Preceding Scatter Diagram The relationship is not perfect; all plotted points in the scatter diagram are not on a straight line. Higher points scored are associated with a higher number of interceptions. The scatter diagram indicates a positive relationship between the number of interceptions and the number of points scored. Example: Panthers Football Team
Measures of Association Between Two Variables So far we have examined numerical methods used to summarize the data for one variable at a time Often a manager or decision maker is interested in the relationship between two variables. Two descriptive measures of the relationship between two variables are covariance and correlation coefficient.

Subscribe to view the full document.

Covariance The covariance is a measure of the linear association between two variables Positive values indicate a positive relationship Negative values indicate a negative relationship.
You've reached the end of this preview.
• Fall '17

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern