What is correlation analysis - Essay Example

What is correlation analysis? Coefficient of correlation is a measure of the strength of the linear relationship between two variables. In this case both variables must be at least the interval scale of measurement and the coefficient of correlation can range from -1.00 up to 1.00. If the correlation between two variables is 0, there is no association between them. A value of 1.00 indicates perfect positive correlation, and -1.00 perfect negative correlations. A positive sign means there is a direct relationship between the variables, and a negative sign means there is an inverse relationship.

In regression analysis estimate one variable based on another variable and regression equation is an equation that expresses the linear relationship between two variables. The variable being estimated is the dependent variable and the variable used to make the estimate is the independent variable. The relationship between the variables must be linear. Both the independent and the dependent variables must interval or ratio scale and the least squares criterion is used to determine the regression equation.

According to this assignment it’s required to express an equation in implicit form for two Major League Baseball teams in order to measure would it be profitable to pay $4 million to a free agent who would raise the team’s winning rate. A hypothesis is an assumption about the population parameter to be tested based on sample information. The statistical testing of hypothesis is the most important technique in statistical inference.