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# Regression analysis for mutual fund data

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Linear regression analysis; construct confidence intervals for regression parameters; correlation coefficient .

We can use two products at my work, which are mutual funds and see if there is a correlation between the two. The two different funds are: a domestic stock mutual fund, which only invests in large organizations (large cap companies) based here in the US and an international mutual fund, which only invests in large foreign-based companies. We can see the relationships between them and the magnitude of those relationships.

Date: USIFX Monthly 2006 USSPX Monthly 2006
Close Close
Dec 1 27 21.24
Nov 1 28.91 21.05
Oct 2 28.1 20.66
Sept 1 27.54 20.01
Aug 1 27.49 19.59
Jul 3 26.57 19.14
Jun 1 26.01 19.03
May 1 25.84 19.09
Apr 3 26.79 19.65
Mar 1 25.63 19.40
Feb 1 24.90 19.24
Jan 3 24.95 19.19

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#### Solution Preview

Please see the attachments. Calculations are done in Excel.

The relationship between the two mutual funds can be illustrated in a scatter diagram

The scatter diagram suggests that there is a positive correlation between the two variables. The degree of relationship is measured by the correlation coefficient

Correlation = 0.753011296

Regression Analysis
The regression ...

#### Solution Summary

The solution contains calculation of regression equation, coefficient of determination, confidence interval for regression coefficients and regression coefficients. Interpretation of the results are also given.

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