Opening weekend box office revenue is an important source of income to the movie industry and a crucial preliminary indicator of long-run profitability of a motion picture. Here are a scatter plot and the residual plot for predicting the World Gross Revenue from the Opening-Weekend Revenues for 136 Hollywood movies in 2011 using simple linear regression. 50 100 150 50 100 150 Opening Weekend Revenue (millions of dollars) Opening Weekend Revenue (millions of dollars) From the two plots above, which assumption of a simple linear model is most clearly violated? (i) linearity (ii) constant variability (iii) normal residuals (iv) independence
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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