0:00
All right, so here we have some data.
00:01
This is the earnings per share, and this is the current stock price for a selection of 16 publicly traded companies that were selected at random.
00:14
And this is if we plot the data out in the scatter plot, and then this blue line is our least squares regression line and here is the equation.
00:24
This has the slope term first, but oftentimes in statistics, you'll see the intercept first, so negative 0 .238 plus 0 .0459x.
00:41
And looking at this, we're gonna answer some questions.
00:44
So for these data, values for earnings per share that are less than the mean of the values for earnings per share.
00:49
So here's earnings per share.
00:50
The mean of the earnings per share would be roughly here.
00:54
This is your mean of the earnings per share, we'll do x bar.
00:59
So values for earnings per share that are less than the mean values for earnings per share, which is all the values here to the left here, kind of like this chunk here, tend to be paired with current stock prices that are blank, the mean of the current stock price.
01:18
Well, the mean of the current stock price would be right in the center.
01:21
This is our y hat, and this tends to be like right about here.
01:23
Y bar is the mean of that current stock price.
01:27
And so what we say is, well, these values of earnings per share that are less than the mean are associated with current stock prices that are less than the mean of the current stock price.
01:41
So that's how we view this data.
01:42
So like the lower mean values that are below the mean of the earnings per share are associated with values of stock prices that are below the mean of the current stock price.
01:59
So that's what we mean, these are associated together...