How To Calculate a Correlation Coeffiicent

The value of a correlation coefficient will always be between 1 and -1. A correlation coefficient that has a value of exactly 1 or -1 would be a perfectly straight line when the data sets are plotted on a graph. Values that are close to 0 tell us there is no relationship between the values of X and Y. Positive correlation coefficients tell us that when one variable is increased, the other variable will increase as well. Negative correlation coefficients tell us that as one of the variables is increased, the other variable will decrease.

Things You'll Need

  • Calculator
  • Correlation coefficient formula: r = ((sum of XY column -- (sum of X column multiplied by the sum of Y column divided by the number of data sets)) / The square root of (sum of X^2 column -- (sum of X column)^2 / number of data sets) multiplied by sum of Y^2 column -- (sum of Y column)^2 / number of data sets )
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Instructions

    • 1

      Make a five-column table of your values with a pen and paper. The column heads will be in the order of X, X^2, Y, Y^2, and XY. The bottom of each column will contain the sum of the values for that particular column.

      Data set:

      X | Y
      1 | 2
      3 | 4
      5 | 6

      Five-column table:

      X| X^2| Y| Y^2| XY|
      1| 1| 2| 4| 2|
      3| 9| 4| 16| 12|
      5| 25| 6| 36| 30|

      9| 35| 12| 56| 44|

    • 2

      Start your calculations to find the numerator of the correlation coefficient
      formula.

      The numerator:

      Sum of XY column = 44
      Sum of X column multiplied by the sum of the Y column / by number of data sets = (9 * 12) / 3 = 36
      Numerator = (44 -- 36) = 4

    • 3

      Calculate the denominator of the correlation coefficient formula.

      The denominator:

      Sum of X^2 column = 35
      Sum of (X column)^2 / number of value sets = 27
      Sum of Y^2 column = 56
      Sum of (Y column)^2 = 48
      Denominator = square root of ((35-27)(56-48)) = about 7.483

    • 4

      Calculate the correlation coefficient by dividing the numerator by the denominator.

      r = 4 / 7.483 = .535

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