## Table of contents

- What is a Scatter Plot?
- The Benefits of Scatter plots
- Importance of Scatter Plots
- Scatter Plot Applications
- How to make a scatter plot in Excel
- An Industry Example
- Here are some examples of scatter diagrams that you can use:
- Kinds of data you can use for scatter analysis
- Scatter Plot and Correlation
- Three Best Practices for Scatter Plots
- Frequently Asked Questions (FAQs) about Scatter Plots
- Related topics

### What is a Scatter Plot?

A scatter plot is also known as a **scatter graph or scatter chart**. All you need are your scatter plot xy variables that can be used to show relationships that exist between them both, whether you’re trying to improve processes or make a strong argument about your marketing focus. These points are an easy and effective way of visualizing where you are now, where you have been and where you want to go. You’ll also learn about scatter plot and correlation throughout this article. Plus, a big advantage is that you can learn how to make a scatter plot in excel or google sheets!

You’ve seen scatter graphs on television screens if you have ever viewed a news briefing regarding a stock’s performance in a market. Let’s see how they work:

### The Benefits of Scatter plots

### Importance of Scatter Plots

If you’re in the business world, you’ll realize that these tools are essential to know, here’s why:

#### Persuasion

A scatter graph is a simple and attractive visualization between two variables, which in scatter plots are xy variables. It can be used to show a clear connection. This tool is great for showing investors and stockholders the benefits and drawbacks of a process change, or for other purposes such as influencing investors or stockholders.

#### Forecasting

You can better prepare for the future by seeing how scatter plots can show you the correlation between variables.

#### Identifying relationships

It’s easy to wonder if something will have an effect on your business. Scatter plots are a quick way to spot correlations. If they don’t affect each other, the data points should look like dispersed dots along the plot.

### Scatter Plot Applications

When you want to determine if two data sets are related, a Scatter Analysis can be used. Scatter plots can be used to visualize the relationship. By plotting data points, you can get a scattering on a graph. Analyzing the data points is how you can determine if there is a pattern. What does that pattern mean?

This is the type of analysis that we use when trying to find the root cause for an issue.

Scatter Graphs can be used to illustrate the “cause and effect” relationship between two types of data as well as to provide additional information about a production process.

### How to make a scatter plot in Excel

Creating a scatter plot in excel is easy once you have all of your data, all you have to do is follow these 4 steps from Excel Easy!

Step 1: Put in your scatter plot xy variables and data, then select the range (example: A1:B10).

Step 2: Go to the Insert tab, in the Charts group, and then click the Scatter symbol.

Step 3: Press on the “Scatter” option.

Step 4: Check out your final result!

Let us know if you were able to create your scatter plot in excel!

### An Industry Example

A CEO of a clothing company plans to gradually increase the prices of all its products over the next couple of years. To determine the ideal price point, they decide to conduct scatter plots. Over the next two years, the company experimented with pricing. They try to raise their price the most they can without affecting the revenue they are generating. They partly analyze the scatter plots to find the ideal price for increasing sales.

### Here are some examples of scatter diagrams that you can use:

- There are two numbers that can be paired together
- Multiple values can be assigned to dependent variables for each figure that is associated with them
- Determining if two variables have a relationship

### Kinds of data you can use for scatter analysis

Continuous data is used in scatter analysis. For failed measurements, discrete data works best. Continuous data allows you to measure things in-depth on an infinite set. It’s commonly used for scattering analysis.

It is possible to use continuous data on the opposite axis and distinct data on the one axis in a scatter graph. You would need to place the distinct data into a quantified band, such as 1-10 for customer satisfaction scores.

You could also put data in discrete formats, such as pass/fail or one of the two bands. However, it’ll rely on the data to determine if it provided any practical data.

Continuous data is the best option.

Attribute Charts might be an excellent choice if you’re searching for a way of visualizing discrete data.

### Scatter Plot and Correlation

A scatter plot uses xy variables: One is a *dependent variable*, and the other is an *independent variable*. The *independent variable* will usually be arranged along its horizontal axis. The *dependent variable* will usually be organized along its vertical axis. If there is no dependent variable, you can arrange either type of the variable on either axis. The scatter diagram indicates a *positive relationship* if the pattern of intersecting dots from the paired comparisons extends from the lower-left towards the upper-right. The *negative correlation* will be spotted if the pattern of dots moves from the upper-left towards the bottom-right. There are two things you should keep in mind:

- Correlation doesn’t necessarily mean
*cause*. Although there might be a correlation that suggests that shark attacks are more common due to ice cream sales, it’s not necessarily a cause and effect. The weather outside is another variable. Warmer weather means that more people eat ice cream, and more people go swimming. - A negative correlation doesn’t necessarily mean that there’s a problem. This simply means that the vertical axis
*decreases*and the horizontal axis*rises*. It’s that simple. Some people believe that a negative correlation is bad. It does not have to do with either good or evil. It’s all about whether there is a positive correlation or not. It’s also important to understand that there is no evidence of a trend either way.

### Three Best Practices for Scatter Plots

To add: You can learn some helpful practices when scatter plotting.

#### 1. Avoid over-plating

Over-plating can happen if you have too many data points. Because the data points are so dense, it can be difficult to spot correlations between variables. This can be overcome by focusing on a small number of data points. If there’s a correlation, this will allow you to see it. Altering the shape or size of the dots can help to reduce overlap.

#### 2. Avoid interpreting something incorrectly

There’s a common phrase in statistics that says, “correlation doesn’t imply causation.” This is the common phrase that statistics uses to say that changes in one variable are not solely responsible for changes in the other. It’s possible that there is a third variable driving the relationship. It’s even possible that the perception of a relationship is just a coincidence.

#### 3. Identifying the correlation

If your scatter plot xy variables are closely related, you’ll see that data points lie along a curve or line. The tighter the correlation, the closer the points will be hugged along the line.

### Frequently Asked Questions (FAQs) about Scatter Plots

#### 1. Can a scatter plot only have two variables?

Yes. There are two independent variables that can be graphed: one on the x-axis, and one on the y-axis.

#### 2. What are the several types of scatter plots?

There are three types of scatter plots or charts: U-shaped, linear and exponential. These are the three most important ones: positive, negative, or no correlation.

#### 3. What’s a better alternative to scatter plots?

If there are too many data points causing overlap, a heatmap might be an alternative to scatter plots.

Scatter points can be used to show relationships between variables, whether you’re trying to improve processes or make a convincing argument about your marketing focus. These points are an easy and effective way of visualizing where you are now, where you have been and where you want to go.