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How to Calculate Correlation Coeffients

The correlation between two sets of data is one of the most ubiquitous statistical procedures out there. In it, you determine the extent of the relationship between two variables, such as degree of education and salary. For small amounts of data, it's easy to calculate by hand -- and indeed very beneficial for understanding the process. With large amounts of date, however, calculating by hand is tedious and extremely time consuming. For this,a spreadsheet program is a very handy tool.

Instructions

  1. Calculating by Hand

    • 1

      Draw five columns on your paper labeled X, X-Squared, Y, Y-Squared, and X*Y. Fill in the data of your two variables in the two columns labeled X and Y.

    • 2

      Add up all the values of your X data and put this number at the bottom of the X column.

    • 3

      Add up all the values of your Y data and put this number at the bottom of the Y column.

    • 4

      Square each individual x data point, and put these numbers in the X-Squared column. Add these numbers all up and put this number at the bottom of the X-Squared column.

    • 5

      Square each individual Y data point, and put these numbers in the Y-Squared column. Add these numbers all up and put this number at the bottom of the Y-Squared column.

    • 6

      Multiple each X with its corresponding Y, and put these numbers in the the X*Y column. Add these numbers all up and put this number at the bottom of the X*Y column.

    • 7

      Count the number of data pairs you have, and write this number as "n= #."

    • 8

      Multiply the sum of X and the sum of Y, then divide by N. Take this number and subtract it from the sum of X*Y.

    • 9

      Square the sum of X and divide it by N. Subtract this from the sum of X squared.

    • 10

      Square the sum of Y and divide it by N. Subtract this from the sum of Y squared.

    • 11

      Multiply the results of steps 9 and 10, then find the square root.

    • 12

      Divide the number from step 8 by the number from step 11. That is your correlation coefficient. Write it as "r= #."

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