In an effort to determine whether any correlation exists between
the price of stocks of airlines, an analyst sampled six days of
activity of the stock market spread out over 4 months. Using the
following prices of Delta stock and Southwest stock, compute the
coefficient of correlation. Stock prices have been rounded off to
the nearest tenth for ease of computation.
Delta | Southwest |
45.96 | 38.76 |
47.3 | 45.41 |
47.93 | 16.1 |
51.78 | 49.58 |
52.17 | 44.34 |
46.96 | 18.4 |
(Round the intermediate values to 2 decimal places.
Round your answer to 3 decimal places.)
r =
Solution :
The correlation coefficient for the sample data will be as follows:
Where,
X : Delta
Y : Southwest
We have, n = 6
The correlation coefficient is 0.502.
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