In a recent survey concerning company sales and net earnings, 15 companies responded with the following information.
Company Sales ($ thousands) Net Earnings ($ thousands) DigiCom 35.8 -1.0 Cola Company 73.5 -2.5 Softouch Co. 48.1 -1.4 Southwest Consulting 36.0 -0.8 SouthCo 51.9 -1.2 JenCo 45.6 -1.4 Financial Services 79.4 -4.1 Antique Accents 32.0 -1.4 Pace Design 52.9 -1.1 The Grayson Group 65.1 -2.1 Swan Furnace Cleaners 63.2 -2.9 SunBlush Technologies 59.0 -1.2 JenStar 65.9 -3.3 Text Tech 36.4 -0.9 PhotoFinish Co. 57.0 -2.0
a) Using your favorite statistical computing tools, find the coefficient of correlation for the data. For full marks your answer should be accurate to at least three decimal places. Note: For this question you can copy and paste the data into a spreadsheet application.
Coefficient of correlation: 0
b) Based on the coefficient of correlation, which of the following statements is most appropriate regarding the linear relationship between company sales and earnings?
The intervals for strong positive, moderate positive, weak positive, weak negative, moderate negative, and strong negative correlation all have the same length on the interval [-1,1].