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Correlation

Correlation measures how closely two numbers move together, from −1 to 1. Near 1: when one rises, so does the other. Near 0: no straight-line link.

Select any words here to ask your Maestro about them.

In one city, electricity use goes up on cold days (heaters) and on hot days (air conditioning). What do you think the correlation between temperature and electricity use is?

Thirty days in a city with cold and hot seasons. Example data.

What the number says: the (Pearson) correlation coefficient runs from −1 to 1. Near 1, when one goes up so does the other; near −1, when one goes up the other goes down; near 0, there's no straight-line link. In Excel: =CORREL(A2:A31, B2:B31).

Before you trust it: draw a scatter plot. A curved link can come out near 0, as in the figure, and a single outlier can inflate it or wipe it out. And two things moving together doesn't prove one causes the other.

Practice it in When to use a scatter plot.

How it's used

How to read the number

=CORREL(A2:A31, B2:B31)

  1. marked: 1: the points fall on a straight line going up.
  2. 0.7: they rise together, with a fair amount of noise.
  3. 0.3: a weak trend; you can barely see it.
  4. 0: no straight line (there may be another shape).
  5. −0.7: when one goes up, the other goes down.The sign gives the direction; the size, how straight it is.
Correlation runs from −1 to 1. Always look at it next to a scatter plot: the number alone doesn't tell you what shape the data has.

When to look closer

Moving together doesn't mean one causes the other

Staff and complaints at 12 branches

  1. marked: Correlation between staff and complaints: 0.8
  2. What it looks like: more staff cause more complaints.

Branches with more staff get more complaints. What do you think drives both?

Ask your Maestro about Correlation

It answers from the free course page closest to this word, the way it answers while you study.

Example

You: What does "Correlation" mean, in plain words?

Your Maestro: I'll explain it with a case of yours: it sticks better than a definition. Which two numbers at work do you think move together?

Asking about: Answers from the page "How do I save a CSV that opens correctly on the other end?"

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Related terms

  • Scatter plot

    A scatter plot draws one dot per case, with one variable on each axis, to show whether two numbers move together: when one goes up, does the other go up, go down, or do nothing?

  • Outlier

    An outlier is a value that sits far from the rest, like a $9,800 order among $300 ones. It can be a data-entry error or a real, important case: before you drop it, find out which.

  • Standard deviation

    Standard deviation measures how far data lands from the average: with an average of 30 and an SD of 2, most values fall from 28 to 32. In Excel: =STDEV.S.

The whole glossary