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Calculate Correlation Coefficient in Google Sheets: A Step-by-Step Guide

A correlation coefficient is a number that measures how closely two sets of data are related. It tells us if changes in one variable are associated with changes in another

What is a Correlation Coefficient Calculation?

A correlation coefficient is a number that measures how closely two sets of data are related. It tells us if changes in one variable are associated with changes in another. This number ranges from -1 to 1. A correlation of 1 means the two are perfectly related positively, meaning if one increases, the other does too. A correlation of -1 means they are perfectly related negatively, meaning if one increases, the other decreases. A correlation of 0 means no relationship exists between the data sets.

How to Calculate Correlation Coefficient in Google Sheets?

Google Sheets offers a simple way to calculate the correlation coefficient between two data columns. Here are the methods you can use:

Method 1: Using the CORREL function

  • Prepare your data: Organize your data in two columns. For example, Column A could be the age of individuals, and Column B their monthly income.
  • Insert the formula: Click on a cell where you want the result to appear. Type the formula =CORREL(A:A, B:B) and press Enter. Example of the formula - (A2:A6, B2:B8)

  • Replace "A:A" and "B:B" with the actual ranges of your data.

Method 2: Using the Chart Tool

  • Highlight your data: Click and drag to highlight the two columns of data you want to analyze.
  • Insert a scatter plot: Go to the menu, select 'Insert', then 'Chart'. Change the Chart type in the Chart Editor to 'Scatter chart'.
  • View the trendline: Click on the scatter chart, then click the three dots in the upper right corner and select 'Edit chart'. In the Chart Editor sidebar, go to 'Customize', then 'Series'. Scroll down and check 'Trendline'. Below this option, check 'Show R2'. The R2 value is the square of the correlation coefficient.