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1,425 277 273 100 915 120 1,687 259 234 40 142 25 57 258 31 894 141 Coefficient of Correlat 0.95684

The document contains claims and surplus data from 9 states' BlueCross BlueShield benefits. It calculates the correlation coefficient between claims and surplus using the Excel CORREL function, finding a coefficient of 0.95684, indicating a strong positive correlation. It then shows the manual calculation of the coefficient of correlation formula, again obtaining 0.95684. So the correlation between claims and surplus is strongly positive.

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Aliza Ishra
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387 views3 pages

1,425 277 273 100 915 120 1,687 259 234 40 142 25 57 258 31 894 141 Coefficient of Correlat 0.95684

The document contains claims and surplus data from 9 states' BlueCross BlueShield benefits. It calculates the correlation coefficient between claims and surplus using the Excel CORREL function, finding a coefficient of 0.95684, indicating a strong positive correlation. It then shows the manual calculation of the coefficient of correlation formula, again obtaining 0.95684. So the correlation between claims and surplus is strongly positive.

Uploaded by

Aliza Ishra
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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12.

4 The following data are the claims (in $ millions) for BlueCross BlueShield benefits for nine states,
along with the surplus (in $ millions) that the company had in assets in those states.

State Claims Surplus


Alabama $1,425 $277
Colorado 273 100
Florida 915 120
Illinois 1,687 259
Maine 234 40
Montana 142 25
North Dakota 259 57
Oklahoma 258 31
Texas 894 141

Use the data to compute a correlation coefficient, r, to determine the correlation between claims and surplus.

SOLUTION

BY USING EXCEL FORMULA

State Claims Surplus


Alabama 1,425 277
Colorado 273 100
Florida 915 120
Illinois 1,687 259
Maine 234 40
Montana 142 25
North Dakota 259 57
Oklahoma 258 31
Texas 894 141

Coefficient of correlat 0.95684

BY USING DATA ANALYSIS

State Claims Surplus


Alabama 1,425 277
Colorado 273 100
Florida 915 120
Illinois 1,687 259 Claims
Maine 234 40 Claims 1
Montana 142 25 Surplus 0.95683603
North Dakota 259 57
Oklahoma 258 31
Texas 894 141

So, the coefficient of correlation is 0.95684.

COMPUTATION OF COEFFICIENT OF CORRELATION

State Claims (x)Surplus (y) x-x‾ y-y‾ (x-x‾)(y-y‾) (x-x‾)^2 (y-y‾)^2


Alabama 1,425 277 749 160.33 120036.22 560,501.78 25706.7778
Colorado 273 100 -403 -16.67 6722.2222 162,677.78 277.7778
Florida 915 120 239 3.33 795.55556 56,961.78 11.1111
Illinois 1,687 259 1,011 142.33 143851.56 1,021,447.11 20258.7778
Maine 234 40 -442 -76.67 33912.222 195,658.78 5877.7778
Montana 142 25 -534 -91.67 48980.556 285,512.11 8402.7778
North Dakota 259 57 -417 -59.67 24900.889 174,167.11 3560.1111
Oklahoma 258 31 -418 -85.67 35837.222 175,002.78 7338.7778
Texas 894 141 218 24.33 5296.5556 47,378.78 592.1111
676 116.67 0 0 420333 2,679,308.00 72026.0000
1.9298E+11
439294.7052

(𝛴(𝑥−𝑥‾)(𝑦−𝑦‾)
r= )/( √𝛴(𝑥−𝑥‾)²(𝑦−𝑦‾)²)

r= 0.95684

So, the coefficient of correlation is 0.95684.


enefits for nine states,

between claims and surplus.

Surplus

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