The correlation coefficient measures the sign (+/-) and the strength of a linear relationship between two quantitative variables.
You can calculate the correlation coefficient in excel by using the function: =correl(x,y)
The correlation coefficient can only take on values between -1 and 1
Values closer to 1 indicate a strong positive linear relationship between the two variables
Values closer to -1 indicate a strong negative linear relationship between the two variables
Values close to 0 indicate a weak or no relationship between the two variables
2/11/2022
Correlation Coefficient
Example: Positive Correlation
Correlation Coefficient = 0.508
Example: Negative Correlation
Correlation Coefficient = -0.393
Example: Weak Correlation
Correlation Coefficient = 0.081
