## Calculating the Correlation Coefficient of Two Variables

The correlation coefficient of two variables, house size (X) and selling price (Y), can be calculated using the CORREL function in Excel. This function takes two ranges of values and calculates how closely related they are. The syntax for the function is CORREL(array1, array2), where array1 is the range of values for the house size (X) and array2 is the range of values for the selling price (Y). For example, assuming that data for both variables are placed on different cells, house size (X): Cell A2 to Cell A16; selling price (Y): Cell B2 to Cell B16, the formula to calculate the correlation coefficient would be CORREL(A2:A16,B2:B16).

## How Does the Correlation Coefficient Work?

The correlation coefficient is a statistical measure that calculates the strength of the linear relationship between two variables. The coefficient takes a value between -1 and 1, where -1 indicates a perfect negative linear relationship, 0 indicates no linear relationship, and 1 indicates a perfect positive linear relationship. The closer the coefficient is to 0, the weaker the relationship between the two variables.

## Interpreting the Correlation Coefficient Results

The result of the CORREL formula will be a number between -1 and 1 that indicates the strength of the linear relationship between the two variables. A value close to -1 indicates a strong negative linear relationship, a value close to 0 indicates a weak linear relationship, and a value close to 1 indicates a strong positive linear relationship.

## Related Questions

• What is the CORREL function in Excel?
• How do I calculate a correlation coefficient between two variables?
• What is the difference between a positive and negative correlation?
• What is the formula for calculating the correlation coefficient?
• How can I interpret the results of a correlation coefficient?
• What is the range of a correlation coefficient?
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