Scatter diagram
Each point represents a pair of values, usually an explanatory variable on the horizontal axis and a response on the vertical axis. Look for direction, form, unusual values and changing spread before fitting a line. The graph can suggest association but cannot alone prove causation or establish a valid forecast outside the observed range.
Worked example
Plot advertising spend against sales for twelve months. An upward pattern may suggest positive association, but seasonality or other factors could influence both.
Common mistake
Treating an upward pattern as proof that advertising caused the sales increase.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | MA | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |
