Learn how the correlation coefficient helps investors gauge relationships between variables, aiding in portfolio diversification and risk management strategies.

How to Calculate the Correlation Coefficient A simple calculation method is to use what's known as the Pearson correlation coefficient calculator, named after the English mathematician Karl Pearson.

Investopedia / Sydney Saporito What Correlation Can Tell You Correlation shows the strength of a relationship between two variables and is expressed numerically by the correlation coefficient.

The correlation function will ask for two rows of data from two identical timeframes. Input, click ok and voila—correlation coefficient. The correlation coefficient is a number between 1 and -1.

What Correlation Can Tell You Correlation shows the strength of a relationship between two variables and is expressed numerically by the correlation coefficient.