... variables are right skewed. To see the skewness, we can add histograms to the axes.
The histogram of net sales along the x-axis at the top of Figure 4 is even more skewed than the histogram of executive compensation! The net sales of about two-thirds of the companies fall in the interval at the far left of the histogram. The skewness makes it impossible to see how variation in one variable is associated with variation in the other.
If all we want to know is how compensation and size are related for the superstars, then we might want to use the correlation between these variables. Even so, it is hard to guess the correlation between sales and compensation; we might not even be sure of the direction. It turns out that the correlation between sales and ...
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