Statistics For Big Data For Dummies by Anderson Alan

Author:Anderson, Alan
Language: eng
Format: epub
ISBN: 9781118940020
Publisher: Wiley
Published: 2015-08-10T16:00:00+00:00

The scatter plot shows that as X increases, Y tends to decrease; the trend line has a negative slope. Therefore, X and Y are negatively correlated.

Figure 12-5 shows a scatter plot and the trend line for two variables that are uncorrelated.

© John Wiley & Sons, Inc.

Figure 12-5: Scatter plot of two uncorrelated variables with a trend line.

The scatter plot shows that as X increases, Y sometimes increases and sometimes decreases. There is no particular pattern to the data. The points appear to be randomly scattered throughout the diagram. As a result, the trend line is nearly flat, and this shows that X and Y are uncorrelated.

For a real-world example, Figure 12-6 shows a scatter plot of the relationship between the price of Apple stock and the Standard and Poor’s 500 stock market index from January 1, 2013 to December 31, 2013.

© John Wiley & Sons, Inc.

Figure 12-6: Scatter plot of daily prices of Apple stock and the S&P 500.

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