Correlation analysis is a statistical method used to evaluate the strength and direction of the linear relationship between two quantitative variables. The goal of correlation analysis is to measure how changes in one variable correspond to changes in another. The result is expressed as a correlation coefficient, which indicates both the strength and direction of the relationship.
The correlation coefficient ranges from -1 to 1:
Correlation analysis is valuable in various fields, including finance, economics, biology, and social sciences, as it helps identify patterns, relationships, and dependencies between variables, providing insights into the nature of their association. It's important to note that correlation does not imply causation; a correlation between two variables does not necessarily mean that one causes the other to change.