16.6. Worked Example

Try these first

1. 1.

   What does a positive covariance indicate?

   Hint

   Remember the direction of change in variables.

2. 2.

   What is the range of possible correlation values?

   Hint

   Think about the extremes of relationships.

3. 3.

   What does a correlation coefficient of 1 mean?

   • Perfect positive correlation
   • No correlation
   • Perfect negative correlation

   Hint

   Think about how correlation ranges from -1 to 1.

4. 4.

   Covariance can have which values?

   • True
   • False

   Hint

   Consider what varies between the variables.

5. 5.

   Given datasets C = {10, 20, 30, 40} and D = {15, 25, 35, 50}, calculate the covariance and explain its significance.

   Hint

   Calculate means first and use the formula for covariance.

6. 6.

   For the datasets E = {1, 0, 0, 1} and F = {0, 1, 1, 0}, find the covariance. Discuss how this reflects their relationship.

   Hint

   Pay attention to how one dataset responds to the other.