Let x be the average number of employees in a group health insurance plan, and let y be the average administrative cost as a percentage of claims. x 3 7 15 36 71 y 40 35 30 26 20 (a) Make a scatter diagram of the data and visualize the line you think best fits the data. (b) Would you say the correlation is low, moderate, or strong? positive or negative? moderate and positive low and positive strong and negative low and negative moderate and negative strong and positive (c) Use a calculator to verify that Σx = 132, Σx2 = 6620, Σy = 151, Σy2 = 4801, and Σxy = 3171. Compute r. (Round your answer to four decimal places.) r = As x increases, does the value of r imply that y should tend to increase or decrease? Explain.
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.
Let x be the average number of employees in a group health insurance plan, and let y be the average administrative cost as a percentage of claims.
| x | 3 | 7 | 15 | 36 | 71 |
| y | 40 | 35 | 30 | 26 | 20 |
(a) Make a
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