What Is Correlation? Correlation, in the finance and investment industries, is a statistic that measures the degree to which two securities move in relation to each other. Correlations are used in ...

Calculating the correlation coefficient is time-consuming, so data is often plugged into a calculator, computer, or statistics program to find the coefficient.

From the statistical definition above, an alternative definition of beta is that it equals the correlation between the stock's returns and the market's returns multiplied by the standard deviation ...

Following up on that, of course, calculating statistical measures such as standard deviation and correlation manually can be cumbersome.

The correlation coefficient is a number between 1 and -1. A number close to 1 means two factors are positively correlated—they rise or fall together and at the same magnitude.

The coefficient of determination is used in statistical analysis to assess how well a model explains and predicts future outcomes. It's more commonly known as r-squared.