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Covariance and Correlation

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See attached file.

There are several methods for calculating fuel economy. Go to the Resources section in this syllabus and open the file mileage.xls. The table in the file indicates the mileage, as calculated by owners and by current standards.

1. Compute the covariance.
2. Compute the correlation coefficient.
3. Which do you think is more valuable in expressing the relationship between the owner and current government standards mileage - the covariance or the correlation coefficient? Explain.
4. What conclusions do you reach about the relationship between owner and current government standards mileage?

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See attached file.

1. Covariance between mileage calculated by owner and by current standards.

Use =covar() function.

covariation =

2. Correlation between mileage calculated by owner and by current standards.

Use =pearson() function.

correlation (r) =

3. Which do you think is more valuable in expressing the relationship between the owner and current government standards mileage - the ...

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