case 1 To find out if there is a relationship between

X (Salary in $ pa) Y (Carprice $)

42763 19455
195387 93965
35672 20858
217637 107164
74734 34036
130550 87806
42976 17927
151132 91518
54936 29479
Steps in excel
correlation Type = correl correl(array1, array2)

OR
Click on data Analysis
click on correlation
select Array for Y
selcet Arraay X
click on labels
Intrepret your results statistically and in the business sense
ere is a relationship between X (a person's salary) and Y (his/her car price). Interpret your results
Y (Carprice $)

correl(array1, array2)
 Mac Donald case Data
Nethourly
wage rate
country Big Mac price X Y
Argentina 1.7 1.2
Australia 1.86 7.8
Brazil 1.48 2.05
Britain 3.14 12.3
Canada 2.21 9.35
Chile 1.96 2.8
China 1.2 2.4
Chkrepublic 1.96 2.4
Denmark 4.09 14.4
Euroarea 2.98 9.59
Hungary 2.19 3
Indonesia 1.84 1.5
Japan 2.18 13.6
Malasia 1.33 3.1
Mexico 2.18 2.2
N zealand 2.22 6.8
Philipiness 2.24 1.2
Poland 1.62 2.2
Russia 1.32 2.6
Sngp 1.85 5.4
S africa 1.85 3.9
S korea 2.7 5.9
Sweden 3.6 1.9
Switzerland 4.6 17.8
Thailand 1.38 1.7
Turkey 2.34 3.2
USA 1.96 0.8
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.83397 Correlation
R Square 0.695507 Coefficient of determination, this should be equal to or greater than 0.7; then the model will be fit, then
Adjusted R 0.673757 this is used when we have multiple variables, otherwise for 2 variables we use only linear method.
Standard E 10.12228
Observatio 16

ANOVA
df SS MS F Significance F
Regression 1 3276.488 3276.488 31.97802 5.94E-05
Residual 14 1434.449 102.4606
Total 15 4710.938

Coefficients
Standard Error t Stat P-value Lower 95%Upper 95%Lower 95.0% Upper 95.0% Apparently my
Intercept -11.13506 8.383661 -1.328186 0.205364 -29.11622 6.846107 -29.11622 6.8461074206
X Variable 0.045536 0.008053 5.654911 5.94E-05 0.028265 0.062807 0.028265 0.0628071506
Regression formula, Y=A=Bx
x=Tv ads spend
y=sales
A=intersept
B=slope

Y=472.30+15.27*x

For every 1 unit ads spend, there is an increase of 15.27 Rs.

Predict sales, if x=15, so what will be my sales

Y=472.30+15.27*15
701.35

If x=52, what will be y

Y=472.30+15.27*52
1266.34
he model will be fit, then we can go ahead with the model. It explains 70% variation of X on Y.
nly linear method.

Apparently my calculation is wrong,

Quarter TV adspend Sales
1 0 236
2 0 456
3 10 875
4 25 799
5 30 910
6 30 971
7 35 931
8 35 1177
9 40 950
10 40 982
11 45 1475
12 45 1359
13 50 1200
14 50 1329
15 55 931
16 55 1300
Step 1
H0 Hypothesis(null hyothesis): There is no "significant" relationship/association between TV ads spent and sales
H1 Alternative hypothesis : There is a significant relationship between the ads spent and sales.

Step 2-use correlation function Alternate method: Go to FORMULA TAB, go to "more formulas" and then u will get the
correl 0.83397042629
CORREL(array1, array2) i.e for array 1-select the whole column of 1st variable & array 2-select whole column of 2nd variable)
Step 3
Since correlation coefficient r=0.83, it has STRONG POSITIVE CORRELATION between the 2 variables.
Conclusion As Tv ads spent increases, the sales increases.

If r=0.002, this denotes that there is no correlation between 2 variable.

That is ads spent may be high, but it is not helping in increasing in sales, not relation at all

If r=-0.83, this denotes strong negative correlation

This means with increase in ads spent, there is a dip in the sales.

If r=0.5, moderate correlation between 2 variable

r should lie between -1 to +1

if r=4, it is a spurious correlation

This means there is something wrong with data set.

REGRESSION
predicting,

Predict sales Y, if X=15

ween TV ads spent and sales

formulas" and then u will get the formula of =CORREL

ct whole column of 2nd variable)

ween the 2 variables.