Question

Think of two variables, they could be from everyday life, that you feel would be strongly correlated, either positively or negatively. Describe why you would care about those two variables being correlated, and if you were to find a linear equation (best fit line) for them, what would you use it for. If you need to do some research online to find examples to post, that would be encouraged.

Answer 1

In real life cases, Income and Expenditures are two variales which are having high positively correlated.

Suppose if we have more income then your expenditures will also be high and if the incomes are lower then the expenditures will also be lower.

Hence both these variables said to be correlated.

Using ccorrelation concept we can find the degree of relationship between two variables.

Regression is one of technique used for prediction.

Assume income and expenditures are two variables then we can predict the expenditure by using income.

The regression model is

Expenditure=a+b*(Income)

where expenditure is dependent variable and Income is independent variable.