Chapter 6 Correlation and Linear Regression.pdf - Chapter 6...

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Scatterplot - plots one quantitative variable against another 6.1 - Looking at Scatterplots Direction of Scatterplot is important Pattern the runs from upper left to lower right is negative Patter that runs from lower left to upper right is positive Also look for form of the scatterplot Strength of relationship - how tightly compact or separated are the points 6.2 - Assigning Roles to Variables in Scatterplots Explanatory (Predictor) Variable - x-axis Independent Variable Response Variable - y-axis Dependent Variable 6.3 - Understanding Correlation Enterprise Value (EV) - A measure of the entire worth of a company Price you'd have to pay to buy the company Market Capitalization (Market Cap) - Includes only the worth of its common equity (stock) Invested Capital (IC) = Total invest that all shareholders and debt holders have made in a company ࠵?࠵? = ࠵? − ࠵?࠵?࠵?࠵? ࠵?࠵? ࠵?࠵? = ࠵? − ࠵?࠵?࠵?࠵? ࠵?࠵? Correlation Coefficient: ࠵? =

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