CORRELATION ANALYSIS

47. Solution

a.

b. Since, the fitted line shows an upward trend, there exists positive relationship rating and share.

c. Sample Covariance, 𝑠𝑥𝑦 = ∑(𝑥𝑖 − 𝑥̅ )(𝑦𝑖 − 𝑦̅)/ n-1 = 80/8=10

Since, 𝑠𝑥𝑦 = 10, there exists positive relationship between rating and share.

Rating Share (x- (y- (x-mean)(y- (x- (y-

(x) (y) mean) mean) mean) mean)² mean)²
19 32 4 7 28 16 49
17 28 2 3 6 4 9
17 29 2 4 8 4 16
14 24 -1 -1 1 1 1
16 26 1 1 1 1 1
12 20 -3 -5 15 9 25
15 24 0 -1 0 0 1
12 20 -3 -5 15 9 25
13 22 -2 -3 6 4 9

𝑠𝑥𝑦 10
d. Sample correlation coefficient, 𝑟𝑥𝑦 = = = 0.99
𝑠𝑥 𝑠𝑦 2.45∗4.12

There exists strong positive relationship between rating and share.

 48. Solution
Speed (x) Miles per (x-mean) (y-mean) (x-mean)(y- (x-mean)² (y-mean)²
gallon (y) mean)
30 28 -12 1 -12 144 1
50 25 8 -2 -16 64 4
40 25 -2 -2 4 4 4
55 23 13 -4 -52 169 16
30 30 -12 3 -36 144 9
25 32 -17 5 -85 289 25
60 21 18 -6 -108 324 36
25 35 -17 8 -136 289 64
50 26 8 -1 -8 64 1
55 25 13 -2 -26 169 4
Sum 420 270 0 0 -475 1660 164
Mean 42 27

Sample Covariance, 𝑠𝑥𝑦 = ∑(𝑥𝑖 − 𝑥̅ )(𝑦𝑖 − 𝑦̅)/ n-1 = -475/9=-52.78

𝑠𝑥 = √1600/9 = 13.33

𝑠𝑦 = √164/9 = 4.28

𝑠𝑥𝑦 −52.78
Sample correlation coefficient, 𝑟𝑥𝑦 = = = -0.93
𝑠𝑥 𝑠𝑦 13.33∗4.28

Strong negative relationship between speed and miles per gallon.

49. Solution
Sample Covariance, 𝑠𝑥𝑦 = ∑(𝑥𝑖 − 𝑥̅ )(𝑦𝑖 − 𝑦̅)/ n-1 = 25.5517037 / 26 = 0.98

𝑠𝑥 = √25.77407/26 = 0.99

𝑠𝑦 = √130.0594/26 = 2.24

𝑠𝑥𝑦 0.98
Sample correlation coefficient, 𝑟𝑥𝑦 = = = 0.44
𝑠𝑥 𝑠𝑦 0.99∗2.24

Weak positive relationship between the variables.

 Loan (y)
14

12

10

0
0 2 4 6 8 10

Solution 51
High Low (x-mean) (y-mean) (x-mean)(y-mean) (x-mean)² (y-mean)²
68 50 0.5 -0.42857 -0.214285714 0.25 0.183673
70 49 2.5 -1.42857 -3.571428571 6.25 2.040816
65 44 -2.5 -6.42857 16.07142857 6.25 41.32653
96 64 28.5 13.57143 386.7857143 812.25 184.1837
57 46 -10.5 -4.42857 46.5 110.25 19.61224
70 45 2.5 -5.42857 -13.57142857 6.25 29.46939
80 73 12.5 22.57143 282.1428571 156.25 509.4694
67 45 -0.5 -5.42857 2.714285714 0.25 29.46939
44 29 -23.5 -21.4286 503.5714286 552.25 459.1837
69 44 1.5 -6.42857 -9.642857143 2.25 41.32653
76 69 8.5 18.57143 157.8571429 72.25 344.898
69 51 1.5 0.571429 0.857142857 2.25 0.326531
70 58 2.5 7.571429 18.92857143 6.25 57.32653
44 39 -23.5 -11.4286 268.5714286 552.25 130.6122
Sum 945 706 0 -2.8E-14 1657 2285.5 1849.429
Mean 67.5 50.42857

a. Sample mean high temperature = 67.5

b. Sample mean low temperature = 50.42857
c. Sample Covariance, 𝑠𝑥𝑦 = ∑(𝑥𝑖 − 𝑥̅ )(𝑦𝑖 − 𝑦̅)/ n-1 = 1657 / 13 = 127.46
𝑠𝑥 = 13.26
𝑠𝑦 = 11.93
 𝑠𝑥𝑦 127.46
Sample correlation coefficient, 𝑟𝑥𝑦 = = = 0.81
𝑠𝑥 𝑠𝑦 13.26∗11.93

Strong positive relationship.