Statistical techniques for measuring the closeness of the relationship between variables. It measures the degree to which changes in one variable are associated with changes in another. It can only indicate the degree of association or covariance between variables. Covariance is a measure of the extent to which two variables are related. Regression and correlation analysis may be either simple or multiple.
Simple analysis uses only two variables, one dependent and one independent.
Multiple analysis deals with three or more variables, one dependent and two or more independent. The lack of precision can be attributed to a number of reasons. Due to the complexity of most marketing and other business problems, complex relationships exist between variables. Even when all relevant variables are included in a model, the functional form of the relationship between the dependent and independent variables may differ from the one selected. The measurement of the dependent and independent variables may be imperfect.