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Learn about correlation, and how to use the CORREL function.

#### Example Excel Spreadsheet

We could teach a whole
stage about correlation.
0:00

For sure, lot's of analysts out
there are constantly debating
0:02

how to think about
correlation versus causation.
0:06

For the sake of this course,
0:09

just know that correlation measures the
relationship between two or more things.
0:11

It is a measurement of the interdependence
of variable quantities.
0:16

These numbers are expressed
in a range between 1 and -1.
0:21

So, if you calculate the correlation
of two variables, and
0:25

the correlation is 1,
that is a perfect correlation.
0:30

If it is around 0.5,
that's a fairly low correlation.
0:35

At 0 there's no correlation.
0:39

-1 will be a perfect negative correlation.
0:43

Let's calculate the correlation of
height and weight in our dataset.
0:49

So here we are back in our spreadsheet
that has data on height and weight.
0:53

You can use a CORREL function to calculate
the correlation between height and weight.
0:58

So, I'm going to hit =,
type in COR, there we go,
1:05

we got the CORREL function right there.
1:11

Parentheticals, array 1,
I'm gonna go over to B2.
1:15

I'm gonna hold down Shift + Ctrl and
press the down arrow.
1:21

Then I'm gonna do comma.
1:27

I press left arrow, now I'm in C2 I'm
gonna hold down Shift + Ctrl and
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press down again.
1:33

And then I'm gonna close
the parentheticals, Return,
1:35

And here we go, 0.85498989.
1:43

Well, that's closer to 1 than 0.5, so
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the correlation in our
dataset between height and
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weight is 0.85,
which is a positive correlation.
1:56

It's not super strong or perfect,
but it's certainly not weak.
2:01

That makes sense for height and weight.
2:07

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