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.

Calculate R-squared in Microsoft Excel by creating two data ranges to correlate. Use the correlation formula to correlate both sets of data, or x and y.

When making large, frequent bets, calculate optimal position sizing if you can, based on the expected payout and your estimate of the correlation between past/expected returns and future returns.

This article explains the significance of linear correlation coefficients for investors, how to calculate covariance for stocks, and how investors can use correlation to predict the market.

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