You can watch a video tutorial here.

The correlation coefficient is a metric that measures the relationship between 2 datasets. In Excel, this can be done using the data analysis tool or by using the CORREL() function.

- CORREL(): this returns the correlation coefficient of 2 sets of data
- Syntax: CORREL(array1, array2)
- Array1: the first dataset
- Array1: the second dataset

- Syntax: CORREL(array1, array2)

## Option 1 – Use the **Data Analysis** tool

*Note: If the **Data Analysis **button is on the **Data > Analyze** ribbon, then skip Steps 1 to 3 below. *

### Step 1 – Open the **Excel Options** window

- Go to
**File > Options**

### Step 2 – Manage the Add-ins

- Go to
**Add-ins** - Select
**Excel Add-ins**from the**Manage**drop-down - Click
**Go**

### Step 3 – Load the **Analysis ToolPak **add-in

- Select
**Analysis ToolPak** - Click
**OK**

### Step 4 – Open the **Correlation **window

- Go to
**Data > Analyze** - Click on the
**Data Analysis**button - In the window, select
**Correlation** - Click
**OK**

### Step 5 – Set the parameters

- Define the input range:
**Input Range**: the range of both the ‘Selling Price’ and ‘KM_driven’ columns- Tick the
**Labels in first row**box **Output Range:**the location where the result is to be displayed

- Click
**OK**

### Step 6 – Check the result

- The correlation coefficient between the variables is displayed

## Option 2 – Use the CORREL() function

### Step 1 – Create the formula

- Select the cell where the result has to be displayed
- Type the formula using cell references:

=CORREL(range of Selling_price, range of KM_driven)

- Press
**Enter**

### Step 2 – Check the result

- The correlation coefficient is displayed