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Correlation
Regression
Regression is defined as, “the measure of the average
relationship between two or more variables in terms of the
original units of the data.” Correlation analysis attempts to study
the relationship between the two variables x and y. Regression
analysis attempts to predict the average x for a given y. In
Regression it is attempted to quantify the dependence of one
variable on the other. The dependence is expressed in the form
of the equations.
Where:
di = xi − yi = the difference between the ranks of corresponding
values Xi and Yi, and
n = the number of values in each data set (same for both sets).
If tied ranks exist, classic Pearson's correlation coefficient
between ranks has to be used instead of this formula.
One has to assign the same rank to each of the equal values. It is
an average of their positions in the ascending order of the
values.
1. Business Barometers
4. Regression Analysis
The regression approach offers many valuable contributions to
the solution of the forecasting problem. It is the means by which
we select from among the many possible relationships between
variables in a complex economy those which will be useful for
forecasting. Regression relationship may involve one predicted or
dependent and one independent variables simple regression, or
it may involve relationships between the variable to be forecast
and several independent variables under multiple regressions.
Statistical techniques to estimate the regression equations are
often fairly complex and time-consuming but there are many
computer programs now available that estimate simple and
multiple regressions quickly.
Merits:
A linear moving average is the less used one out of all. But it
solves the problem of equal weightage. The difference between
simple average and linear average method is the weightage that
is provided to the position of the prices in the latter. Let’s
consider the above example. In linear average method, the
closing price on the
15th day is multiplied by 15, the 14th day closing price by 14 and
so on till the 1st day closing price by 1. These results are totalled
and then divided by 15.
Characteristic of Statistics
Functions of Statistics