 In simpler terms, heteroscedasticity is when the variance of formula_54 depends on the value of formula_55 which causes the residual plot to create a "fanning out" effect towards larger formula_54 values as seen in the residual plot to the right.On the other hand, homoscedasticity is assuming that the variance of formula_54 and formula_14 is equal.The first principal component about the mean of a set of points can be represented by that line which most closely approaches the data points (as measured by squared distance of closest approach, i.e.