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Statistics - Correlation and Causation - Example

Does correlation equal causation? Does the strength of correlation depend on the direction? What is the meaning of a zero correlation? Explain your answers. Provide an example of variables you feel might be correlated in your place of business. For instance, hours of studying would be correlated to scores received on a test.

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(a) In correlation analysis, we calculate the correlation coefficient which is a measure of the degree of covariablity between X and Y. Correlation is merely a tool to ascertain the degree of relationship between X and Y. We can not assign cause and effect relationship between X and Y. ...

Solution Summary

Correlation and causation are examined. A complete, neat and step-by-step solution is provided in the attached file.