Q1: An owner of ice cream shop approached you to help him build a machine learning model that predict his shop's sales. He mentioned that he observed a strong positive correlation between the increasing sales of the sunglasses shop next door and his shop's sales, as shown in Fig. 1 below. Therefore, he collected the data and want you to build the model. What do you think of the data? How would you build the model? Please explain you answer in details. Hint: correlation vs causation. $700 $600 $500 $400 $300 $200 $100 SO 100 120 140 160 180 200 220 240 260 Sunglasses Sold Ice Cream Sales
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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