Date DJIA S&P January 6 12360 1278 January 13 12422 1289 January 20 12720 1315 January 27 12660 1316 February 3 12862 1345 February 10 12801 1343 February 17 12950 1362 February 24 12983 1366 March 2 12978 1370 March 9 12922 1371 March 16 13233 1404 March 23 13081 1397 March 30 13212 1408 April 5 13060 1398 April 13 12850 1370 a.Develop the estimated regression equation. b. Test for a significant relationship. Use a = .05. c. Did the estimated regression equation provide a good fit? Explain. d. Suppose that the closing price for the DJIA is 13,500. Predict the closing price for the S&P 500. e. Should we be concerned that the DJIA value of 13,500 used to predict the S&P 500 value in part (e) is beyond the range of the data used to develop the estimated regression equation?
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.
Date DJIA S&P
January 6 12360 1278
January 13 12422 1289
January 20 12720 1315
January 27 12660 1316
February 3 12862 1345
February 10 12801 1343
February 17 12950 1362
February 24 12983 1366
March 2 12978 1370
March 9 12922 1371
March 16 13233 1404
March 23 13081 1397
March 30 13212 1408
April 5 13060 1398
April 13 12850 1370
a.Develop the estimated regression equation.
b. Test for a significant relationship. Use a = .05.
c. Did the estimated regression equation provide a good fit? Explain.
d. Suppose that the closing price for the DJIA is 13,500. Predict the closing price for the S&P 500.
e. Should we be concerned that the DJIA value of 13,500 used to predict the S&P 500 value in part (e) is beyond the
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