Business Applications of Multiple Regression

CORRELATION ANALYSIS 33

Some Correlation Examples

We will now look at some more correlation examples using the data sets

discussed earlier.

Broilers

Figure 1.1 shows a set of data that was very strongly correlated. This chart

shows the top 25 broiler- producing states for 2001 by both numbers and

pounds. The data are shown in Table 1.1. The resulting correlation is

0.9970. As expected, this value is both strong and positive.

Tag Numbers and Sine Wave

Figure 1.2 shows the tag number example, which is discussed earlier.

That correlation is 0.4158. Figure 1.3 shows the sine wave. As discussed,

that correlation is – 0.0424, or about zero.

Stock and Bond Returns

Table 1.3 shows the actual returns on stocks, bonds, and bills ...