Question

The sample data below shows the average temperature (x, in degrees Fahrenheit) and monthly heating bill (y, in dollars) for 12 recent months. Use Excel to compute the correlation coefficient.

Answer 1

The Correlation coefficient is -0.347, rounded to three decimal places.

The correlation coefficient is a measure of the strength and direction of the linear relationship between two variables.

In this case, the correlation coefficient is negative, which means that there is an inverse relationship between average temperature and monthly heating bill.

This means that as the average temperature increases, the monthly heating bill decreases.

The strength of the correlation coefficient can be interpreted as follows:

0.00 to 0.25: Weak correlation

0.25 to 0.50: Moderate correlation

0.50 to 1.00: Strong correlation

In this case, the correlation coefficient is -0.347, which is considered a weak correlation. This means that there is a weak inverse relationship between average temperature and monthly heating bill.