We use correlation in statistical terms to denote the association between two quantitative variables. Note that we have used the term quantitative variables. This should be meaningful to you. If not, we suggest you pause here and go through Chapter 1, Exploratory Data Analysis Fundamentals.
When it comes to quantitative variables and correlation, we also assume that the relationship is linear, that is, one variable increases or decreases by a fixed amount when there is an increase or decrease in another variable. To determine a similar relationship, there is the other method that's often used in these situations, regression, which includes determining the best straight line for the relationship. A simple equation, called the regression equation, can represent the relation:
Let's examine this formula:
- Y = The dependent variable (the variable...