Data analysis
Problem Solving Methods and Analysis – Data analysis
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The Dow Jones Industrial Average (DJIA) and the Standard & Poor (S&P) 500 Index are both used as measures of overall movement in the stock market. The DJIA is based on the price movements of 30 large companies; the S&P 500 is an index composed of 500 stocks. Some say the S&P 500 is a better measure of stock market performance because it is broader based. The closing price for the DJIA and the S&P 500 for 10 weeks, beginning with February 11,2000 are shown (Barron’s April 17, 2000)
Date
Dow Jones
S&P 500
11.Feb
10425
1387
18.Feb
10220
1346
25.Feb
9862
1333
03.Mar
10367
1409
10.Mar
9929
1395
17.Mar
10595
1464
24.Mar
11113
1527
31.Mar
10922
1499
07 Apr
11111
1516
14 Apr
10306
1357
Note: Consider DJIA as the independent variable
Develop a scatter diagram for these data and interpret the same.
Compute the sample correlation coefficient for these data.
Are they poorly correlated, or do they have a close association?
Develop the least squares estimated regression equation .
Compute the coefficient of Determination? Would you recommend the regression model for the purpose of estimation?