For all of you fellow Statistics Fans out there, one of my Excel tools are the Scatterplot (XY) Chart and the Coefficient of Determination function.
A Scatterplot Chart is commonly used to show the relationship between two variables or sets of data. For example, a sales manager could plot the number of sales calls taken with the number of sales made. Another example is comparing the average length of time a customer service representative takes per call and the overall quality score of their calls.
To determine how strong the correlation is between the sets of data, the brilliant (and soon to be more appreciated) Excel user can make a Scatterplot Chart and and then do the following:
1. Right-click on one of the data points and
2. Choose Add Trendline
3. Right-click the Trendline and choose Format Trendline
4. Format the Trendline to your aesthetic preferences and
5. Put a Checkmark next to Display R-squared Value on Chart
The R-squared value is your Coefficient of Determination (COD) that will tell you how strong your data on your two axes. This will range from -1.00 to +1.00. In the graph example above the COD value is .5574 (or approximately 56%) representing a strong correlation (and therefore reasonable credible).
That's it in a Nutshell! Try using a Scatterplot and Coefficient of Determination sometime when seeking the correlation of data sets. It’s easy and can reveal some valuable information. Just remember, Correlation Does Not Equal Causation...
A Scatterplot Chart is commonly used to show the relationship between two variables or sets of data. For example, a sales manager could plot the number of sales calls taken with the number of sales made. Another example is comparing the average length of time a customer service representative takes per call and the overall quality score of their calls.
To determine how strong the correlation is between the sets of data, the brilliant (and soon to be more appreciated) Excel user can make a Scatterplot Chart and and then do the following:
1. Right-click on one of the data points and
2. Choose Add Trendline
3. Right-click the Trendline and choose Format Trendline
4. Format the Trendline to your aesthetic preferences and
5. Put a Checkmark next to Display R-squared Value on Chart
The R-squared value is your Coefficient of Determination (COD) that will tell you how strong your data on your two axes. This will range from -1.00 to +1.00. In the graph example above the COD value is .5574 (or approximately 56%) representing a strong correlation (and therefore reasonable credible).
That's it in a Nutshell! Try using a Scatterplot and Coefficient of Determination sometime when seeking the correlation of data sets. It’s easy and can reveal some valuable information. Just remember, Correlation Does Not Equal Causation...
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