A statistics professor bought a new car for $35,000. For the next 5 years, she used several automotive web pages to estimate the value of the car. She then found the least‑squares regression line for the data to be ?̂ =35035.71−4142.86? . The correlation coefficient was −0.99 . Would it be accurate to use this equation to predict the value of the car after 10 years?
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
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