Activity: Studying Correlated Variables

Steps for Completion:

  1. Make a subset of the loan dataset by using some of the following variables:
df3_1 <- df3[,c("funded_amnt","annual_inc","dti","inq_last_6mths",
"total_acc","total_pymnt_inv")]
  1. Use cor for the preceding loan data subset, and then choose two highly correlated variables in the loan dataset. Use pairs, as follows:
total_rec_prncp and total_pymnt_int
funded_amnt,total_pymnt_inv
  1. Make a scatterplot for the preceding pairs for grade A, then fit a linear regression model.
  2. Determine what are the correlations of the preceding pairs.

Outcome:

Answer to step 4: The correlations are as follows:

  1. 93%
  2. 85%
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