Interpreting technology: The following display from the TI-84 Plus calculator presents the least-squares regression line for predicting the price of a certain stock y from the prime interest rate in percent x LinReg y=+abx a=2.29525776 b=0.38970413 r^2=0.4319044662 r=0.65719439 Regression line equation: 2.295225776+.38970413x What is the correlation between the interest rate and the yield of the stock?
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.
Interpreting technology: The following display from the TI-84 Plus calculator presents the least-squares regression line for predicting the price of a certain stock y from the prime interest rate in percent x
| LinReg | ||
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y=+abx
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||
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a=2.29525776
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||
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b=0.38970413
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||
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r^2=0.4319044662
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||
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r=0.65719439
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Regression line equation: 2.295225776+.38970413x
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