Correlation is a statistical measure of how two securities move in relation to each other. Investors use correlation to diversify their portfolios and hedge against risk.

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.

Calculating the Pearson correlation coefficient can be complicated but software makes it much easier. You can use several methods to calculate correlation in Excel.

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