A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price of their product. To do this, the company randomly chooses 6 small cities and offers the candy bar at different prices. What is the correlation between candy price and sales? City Price ($) Sales Miami 1.30 100 McKinney 1.60 90 Newberg 1.80 90 Prescott 2.00 40 Tacoma 2.40 38 San Jose 2.90 32
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price of their product. To do this, the company randomly chooses 6 small cities and offers the candy bar at different prices. What is the
|
City |
Price ($) |
Sales |
|
Miami |
1.30 |
100 |
|
McKinney |
1.60 |
90 |
|
Newberg |
1.80 |
90 |
|
Prescott |
2.00 |
40 |
|
Tacoma |
2.40 |
38 |
|
San Jose |
2.90 |
32 |
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