Suppose we want to predict the price of an external hard drive from its capacity. Use the table below to answer the following questions (source: De Veaux, Intro Stats, 4th Edition). a) Identify the explanatory and the response variable. b) Use your calculator to create a scatterplot. Describe the scatterplot (direction, form, strength, and outliers). c) Use your calculator to determine the correlation coefficient.
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.
Suppose we want to predict the price of an external hard drive from its capacity. Use the table below to
answer the following questions (source: De Veaux, Intro Stats, 4th Edition).
a) Identify the explanatory and the response variable.
b) Use your calculator to create a scatterplot. Describe the
scatterplot (direction, form, strength, and outliers).
c) Use your calculator to determine the
coefficient
d) Use your calculator to find the linear regression line. Be sure to use correct notation when writing
your answer.
e) State the slope and interpret it in the context of the problem.
f) According to Amazon, a 20 TB drive was listed at $2017.86. What is the residual for this
prediction? Was this an over or an underestimate?
| Hard Drive Capacity (in TB) | Price ( in $) |
| 0.5 | 57.99 |
| 1.0 | 75.99 |
| 2.0 | 109.99 |
| 3.0 | 105.99 |
| 4.0 | 144.97 |
| 6.0 | 435.55 |
| 8.0 | 587.27 |
| 12.0 | 1073.97 |
| 32.0 | 4505.00 |
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