Simple linear regression Flashcards
What is simple linear regression?
Statistical tool used to study nature between 2 variables, used to make prediction and strategic decisions
What is a scatter diagram?
Visual tool used to show relationship between 2 variables in data set, consists of data points that plot one variable on x axis and one on the y axis.
What does strong positive correlation mean?
2 variables moving very closely in same direction in scatter diagram
What does weak positive correlation mean?
2 variables moving in same direction in scatter diagram but loosely related
What does strong negative correlation mean?
2 variables moving together in opposite direction in scatter diagram
what does weak negative correlation mean?
2 variables moving together in opposite direction but loosely related
What does no correlation mean?
Data set that shows no positive or negative correlation, suggests there is no relationship between 2 variables.
What does line of best fit mean?
Calculating and drawing straight line that goes through middle of points in scatter graph, used to get approximation to best show trend revealed in scatter graph
What does extrapolation mean?
Estimates data values beyond original data set and used to determine type of correlation. Used as a prediction tool to forecast anticipated trends
What are adv of simple linear regression?
Justifies decision making
Minimizes risks
What are dis of simple linear regression?
- Random variation and outliers in data set can distort results
- Benefits subject to the validity of data collected
- Seasonal fluctuations make it challenging to determine relationships and correlation
What does causation mean?
Causation indicates that occurence of one event causes the occurence of a second event, correlation can explain causations but not always.
