Measures of Association & Correlation in Business

Question 1

independent variable

Answer 1

a condition or piece of data in an experiment that can be controlled or changed

Question 2

dependent variable

Answer 2

a condition or piece of data in an experiment that is controlled or influenced by an outside factor, most often the independent variable.

Question 3

correlation

Answer 3

the relationship between two sets of variables used to describe or predict information

Question 4

positive correlation

Answer 4

where the dependent variables and independent variables in a data set increase or decrease together.

Question 5

negative correlation

Answer 5

where the dependent variables and independent variables in a data set either increase or decrease opposite from one another.

Question 6

Causation

Answer 6

also known as cause and effect, is when an observed event or action appears to have caused a second event or action.

Question 7

scatterplot

Answer 7

a visual representation of the relationship between two variables

Question 8

correlation

Answer 8

relationship between the two variables

the relationship between two sets of variables used to describe or predict information

Question 9

correlation coefficient

Answer 9

defined as a numerical representation of the strength and direction of the relationship.
the degree in which the change in a set of variables is related
denoted as big R or little r as a measure of the statistical relationship between x and y

Question 10

Pearson correlation

Answer 10

a statistical procedure for determining the correlation of normally distributed, interval or ratio data
Normally distributed is a way to describe the spread of the data
a very helpful statistical formula that measures the strength between variables and relationships
often referred to as the Pearson R test

Question 11

Statistical procedure

Answer 11

a statistical formula that you’ll work with.

Question 12

Normally distributed

Answer 12

a way to describe the spread of the data.

Question 13

Interval and ratio

Answer 13

the quantitative measurement of data

Question 14

sigma

Answer 14

to sum

Question 15

Coefficient of determination

Answer 15

denoted as big R2 or little r2 is a quantity that indicates how well a statistical model fits a data set

Question 16

regression line

Answer 16

a line of best fit for the data points

Question 17

coefficient value,

Answer 17

determines how strong the relationship is between two variables

Question 18

negatively correlated

Answer 18

If the coefficient value is in the negative range, then that means the relationship between the variables
as one value increases, the other decreases

Question 19

positively correlated

Answer 19

If the value is in the positive range, then that means the relationship between the variables
each variable rises or falls exactly as the other does

Question 20

CORREL function

Answer 20

function to calculate the coefficient or use an Add-in, the Analysis ToolPak