The following data are based on information from Domestic Affairs. 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 35 75 y 40 35 30 25 18 Make a scatter diagram and draw the line you think best fits the data. Would you say the correlation is low, moderate, or strong? positive or negative? Use a calculator to verify that: Compute r. As x increases from 3 to 73, 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.
The following data are based on information from Domestic Affairs. 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 |
35 |
75 |
|
y |
40 |
35 |
30 |
25 |
18 |
- Make a
scatter diagram and draw the line you think best fits the data. - Would you say the
correlation is low, moderate, or strong? positive or negative? - Use a calculator to verify that:
Compute r. As x increases from 3 to 73, does the value of r imply that y should tend to increase or decrease? Explain.
The given data based on information from Domestic Affairs is
| X | Y |
| 3 | 40 |
| 7 | 35 |
| 15 | 30 |
| 35 | 25 |
| 75 | 18 |
Where,
X: The average number of employees in a group health insurance plan.
Y: The average administrative cost as a percentage of claims.
We have to,
- Make a scatter diagram and draw the line that we think best fits the data.
- Find whether the correlation is low, moderate, or strong? positive or negative?
- Using a calculator verify that: Compute r. As x increases from 3 to 73, does the value of r imply that y should tend to increase or decrease? Explain.
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