Scatter Diagrams: Visualizing Relationships Between Variables
- Scatter diagrams are graphs that plot two variables against each other to identify patterns or relationships.
- They help businesses visualize how changes in one variable might affect another.
A company might use a scatter diagram to see if there's a relationship between advertising spend and sales revenue.
Self review- Can you tell what's missing from the diagram?
- Be sure to always label your axes clearly depending on your data set to ensure the data is easy to interpret.
Line of Best Fit: Identifying Trends
- The line of best fit is a straight line drawn through the data points on a scatter diagram.
- It summarizes the relationship between the variables and helps identify trends.
If a scatter diagram shows a positive relationship between advertising spend and sales, the line of best fit will slope upwards.
How to Draw a Line of Best Fit
- Balance the Line: Ensure the line has roughly equal numbers of points above and below it.
- Minimize Distance: The line should be as close as possible to all points, reducing the overall distance between the line and the points.
- The line of best fit doesn't have to pass through any specific point.
- Its goal is to minimize the distance to all points.
Correlation: Measuring the Strength of Relationships
- Correlation measures the strength and direction of the relationship between two variables.
- It helps businesses understand how closely related the variables are.
Types of Correlation
- Positive Correlation: As one variable increases, the other also increases.
