Topic: Correlation & Regression

Submitted by:
Group 7
Abhishek Vishal (DM21B04)
Arjun Mukherjee (DM21A16)
Mayank Kumar (DM21E07)
Poulami Chatterjee (DM21A34)
Soumya Roy (DM21B54)
Souvik Bakshi (DM21C51)
Correlation:

It shows the quantity of the degree to which two variables are

associated.

Objective: To find a value expressing the relationship between two

variables.

Example: Correlation between Attitude towards City and Duration of

Residence
179.66/ SQRT( 304.67 * 120.91)
=0.93
Regression:
Describes how an independent variable is associated with the dependent
variable.

Y = + (X)+ ∈
Objective: To estimate values of a random variable based on values of a
fixed variable.

Applications: Analysing trends and sales estimates, Salary forecasting

Prediction model:
=$B$40+$B$41*B2+ Actual Sales – Predicted Sales
$B$42*C2+$B$43*D2+
$B$44*E2+$B$45*F2+
$B$46*G2
Related Parameters & Terminologies

: Also Known as the Coefficient of Determination/ Goodness of fit. It is a metric that tells
the performance of the model.

R² = 1 - (SSE/TSS)

( 1 – Squared Sum of residuals / Total sum of squares )

154.24/6763.73 = 0.022
( 1 – 0.022) = 0.97

where k is the no. of regressors or

predictors.

Adjusted R square will always be less

than or equal to R square.
R2 Statistic is
measure of
goodness of
fit
0 ≤ R2 ≤ 1
This model is able to
explain about 97%
variation of change in
Sales