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How is correlation analysis used in a business decision?

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(1) How is correlation analysis used in a business decision?
(2) What is the standard error of estimate? Describe with an example.
(3) What are the coefficients of the linear regression model and what do they mean? What are the various statistics reported in a regression output?
(4) How do outlying observations affect regression analysis?

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How is correlation analysis used in a business decision?

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(1) How is correlation analysis used in a business decision?
Correlation between two variables indicates the strength of relationship between the two variables, and can also be used to test whether any linear regression performed between the two variables is string enough to be trustworthy. For example, if data is collected on the amount of money spent on advertising for a certain product and the volumes of actual sales of the product, a strong positive correlation between these two sets of data indicates that the company can spend a reasonable amount of money on ...

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