5. The following output from R presents the results from computing a linear model. In our data example we are interested to study the relationship between TV budget and sales This R output is for a simple data set that contains, in thousands of dollars, TV budget for 200 different markets along with the Sales, in thousands of units, for each market. summary (model1) ## ## Call: ## Lm (formula = Sales TV, data = train) ## ## Residuals: ## Min 10 Median 30 Маx ## -8.5816 -1.7845 -0.2533 2.1715 6.9345 ## ## Coefficients: ## Estimate Std. Error t value Pr(>|t|) ## (Intercept) 6.764098 0.607592 11.13 <2e-16 *** ## TV 0.050284 0.003463 14.52 <2e-16 *** ## -- ## Signif. codes: 0 '*o*' 0.001 '**' 0.01 '*' 0.05 '.' 0.1'' 1 ## ## Residual standard error: 3.204 on 120 degrees of freedom ## Multiple R-squared: 0.6373, Adjusted R-squared: 0.6342 ## F-statistic: 210.8 on 1 and 120 DF, p-value: < 2.2e-16 confint (model1) ## 2.5 % 97.5 % ## (Intercept) 5.56110868 7.96708701 ## TV 0.04342678 0.05714057 a. Test at a 5% significance level whether B, is negative.
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
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