Whenever we have data, we are interested in getting some meaningful insights from it. Most of the time, we are either interested in predicting something, or in finding a relationship or causation between variables. Such a causation or relationship can be expressed as an equation.
The example of such an equation is one that we display in charts – yes that is a mathematical representation of the relationship of two variables – how one varies with other, or what change in one cause a change in the other.
A relations between two variables can be represented by linear, quadratic or lastly, with polynomials. This post covers only exploring the “linear” relationship between variable.
To achieve this, we will be using two functions:
1- SLOPE ()
2- INTERCEPT ()
Assuming that we have two variables X and Y and that we are trying to develop a relationship between then, here is what we usually do and what we are trying to achieve through this post: we are trying to find the slope and the intercept of the equation that is automatically displayed when equation is displayed on charts.
This function returns the first part or m of a linear equation. It takes values of X and Y as argument – has following syntax
= SLOPE (known_y's, known_x's)
Where X and Y have their usual meanings.
The intercept for y=mx+b is the point where line cuts y-axis. In excel we calculate this value with INTERCPET () function. This function takes following arguments: