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sum_w2 - SUMMARY OF WEEK 2[STAT4610 Applied Regression...

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SUMMARY OF WEEK 2 [ STAT4610 Applied Regression Analysis ] 1 FALL 10, DR. NEDRET BILLOR| Auburn University CHAPTER 1 A) Covariance and Correlation Descriptive Measures for Association Between Two Quantitative Variables Covariance: depends on the units of measurement for X and Y! Correlation : unitless, and Always 1 r xy 1 , s x : standard deviation of X s y : standard deviation of Y If r xy =1 perfect POSITIVE linear relationship If r xy = 1 perfect NEGATIVE linear relationship Correlation vs. Regression a) r xy is only a measure of direction and strength of linear relationships, can not be used for prediction purposes. Regression analysis can be used for prediction. b) r xy measures only pairwise relationships. Regression analysis can be used to relate one or more response variable to one or more predictor variables. B)Simple Linear Regression (SLR) Model i) Formal Statement of SLR Model Y i = 0 + 1 X i + i , i=1,2,….,n (Linear in parameters, linear in predictor (1st order model) where Y i : the value of the response response

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