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# Correlation: Calculate and interpret the correlation between variables.

The product development team at Piggybank is wondering if there is a correlation between retail online sales and total retail sales, so calculate the correlation between online and total retail sales, and interpret the results. If your peers are struggling with the calculations, share examples and insights to help them along. Give two examples of correlation which are evaluated in a business environment and discuss the decision made by evaluating the correlation.

Here are the total sales numbers
787,362
715,102
775,364
768,559
812,667
723,710
801,115
777,882
850,608
740,020
818,609
822,125
864,653
772,185
858,793
872,634
918,245

Here are online sales numbers
5,393
5,722
6,250
7,079
9,248
8,009
7,904
7,894
10,788
9,470
9,761
10,465
13,770
11,928
12,464
13,284
17,226

The objectives (required):
1. Calculate and interpret the correlation between variables.
2. Use effective communication techniques.
3. Give examples of how correlation can be applied to business decisions.

#### Solution Preview

Please see the attached file for complete answers.

"Correlation is a measure of association between two variables. The variables are not designated as dependent or independent.
The value of a correlation coefficient can vary from minus one to plus one. A minus one indicates a perfect negative correlation, while a plus one indicates a perfect positive correlation. A correlation of zero means there is no relationship between the two variables. When there is a negative correlation between two variables, as the value of one variable increases, the value of the other ...

#### Solution Summary

Correlation between total sales numbers and online sales numbers is calculated.

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