Correlation

Correlation & Regression

Data X-Data Y-Data
Observation Ads Sales REGRESSION STATISTICS
Obs 1 20 48 Observations 10
Obs 2 15 38 Correlation coefficient (r) 0.978
Obs 3 12 33 Coefficient of determination (r-squared) 96%
Obs 4 32 65 Standard error of the estimate 3.469
Obs 5 17 40
Obs 6 8 18 REGRESSION EQUATION
Obs 7 10 25 Slope 2.017
Obs 8 16 35 Intercept 5.134
Obs 9 20 50 Sales = 5.134 + 2.017 (Ads)
Obs 10 5 12
Obs 11 PREDICTING WITH THE REGRESSION EQUATION
Obs 12 X value 20
Obs 13 Confidence Level 95%
Obs 14 Predicted Y value 45.477
Obs 15 Confidence Interval 45.477 + 2.978
Obs 16 Prediction Interval 45.477 + 8.535
Obs 17
Obs 18 HYPOTHESIS TEST FOR CORRELATION
Obs 19 Null hypothesis: Slope = 0 (no correlation)
Obs 20 Level of Significance 0.05
Obs 21 t-Statistic (computed) 13.3189
Obs 22 p-value 0.0000
Obs 23 Decision Reject the null hypothesis
Obs 24 Conclusion Conclude that correlation exists.
Obs 25
Obs 26 ANOVA SS df MS
Obs 27 Regression 2134.1544 1 2134.1544
Obs 28 Error 96.2456 8 12.0307
Obs 29 Total 2230.4000 9
Obs 30
Obs 31
 Correlation

F F crit
177.3924 5.3177
 Sales = 5.134 + 2.017 (Ads)
70

60

50

40
Sales

30

20

10

0
0 5 10 15 20 25 30 35

Ads
r = 0.978 r-squared = 0.957