Did the price of silver correlate well to the price of gold in 2007?
Here are twelve values, each pair taken from a Friday in each month from January to December. The x value is silver and the y value is gold, both in dollars.
Jan 13.45 652.90
Feb 14.49 682.90
Mar 13.03 655.20
Apr 14.01 684.80
May 12.90 654.90
Jun 13.19 654.50
Jul 12.86 664.10
Aug 12.02 673.20
Sep 12.77 715.00
Oct 14.17 783.50
Nov 14.69 808.80
Dec 14.76 838.80
1) What is rx,y? Is it above the 95% confidence level for n = 12? What about the 99% confidence level?
2) If rx,y surpasses either, find the coefficients a and b in the equation yp = ax + b.
3) If rx,y surpasses either, find the month with the lowest absolute residual and the highest absolute residual, which is to say |yp - y| for all twelve months.
Answers in the comments.
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2 comments:
1) r_x,y = .699 when rounded to three decimal places. It's better than the 95% correlation threshold of .576, but not above the 99% correlation threshold of .708.
2) Rounded to three decimal places, the formula is y_p = 52.962x - 10.778. If you have the TI-30XIIs, you won't have to round the values for the next part.
3)
Jan 48.667
Feb 73.749 highest absolute value
Mar 24.124
Apr 46.427
May 17.539
Jun 33.298
Jul 6.220 lowest absolute value
Aug 47.368
Sep 49.447
Oct 43.799
Nov 41.559
Dec 67.851
Thanks. I didn't have the sheets I handed out to the class in front of me, and took these numbers from a source that disagrees with the numbers on our table. .505 is the number we have on our table.
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