Hello! This is Orcel Saito.
There is a function called correlation function in Excel and spreadsheets, and I use it often.
It's super easy and you can immediately see what the key points are.
If you have the data, you can solve the problem in 5 seconds.
Today, I would like to ask ChatGPT to explain correlation functions.
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**Introduction**
Hello, e-commerce site operators! Today I'll be talking about correlation functions.
This helps you understand how two different data sets (e.g., "monthly sales" and "ad clicks") are related.
So let's get started!
**What is correlation?**
Correlation is a measure of how closely two things are related.
For example, this is useful when you want to know how closely "advertising costs" and "sales" are related.
**What is a correlation function?**
The correlation function tells us how similar (i.e. related) two data sets (A and B) are, with a value ranging from -1 to 1.
The closer the value is to 1, the stronger the positive association between the two data sets; the closer it is to -1, the stronger the negative association.
Close to 1 = As A increases, B also increases
Close to -1 = As A increases, B decreases
Close to 0 = A and B are not very related
**Calculate correlations in Excel**
1. **Prepare your data**
- For example, enter "Monthly advertising expenses" in column A and "Monthly sales" in column B.
2. **Using correlation functions**
- Select a new cell and enter the following function: `=CORREL(Range1, Range2)`
- For example, if the data in column A is from A2 to A12 and the data in column B is from B2 to B12, enter the following:
=CORREL(A2:A12, B2:B12)
Press the Enter key and the correlation coefficients will be displayed.
**Interpret the data**
Understand data relationships using correlation coefficients derived from Excel.
If the correlation coefficient between advertising expenses and sales is 0.8, then it is highly likely that sales will increase as advertising expenses increase.
**summary**
By using correlation functions, you can find out how various variables (advertising, weather, season, etc.) correlate with sales in your e-commerce website operations. Use this information to evolve your business strategy to be more data-driven!
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What is the key to increasing sales?
Is it access, conversion rate, unit price, what category of product is it, whether it's a new or repeat customer?
This misjudgment is often the main reason for stagnant sales.
1. Download the data in CSV format
2. Check the location of the sales column and the column you want to check (for example, number of hits) (in this case, let's assume that these are columns A and B).
3. =CORREL(A2:A12, B2:B12)
By simply displaying the data like this, you can see what is linked to sales.
The number closest to 1 is the answer.
Even so, ChatGPT is smart and easy to understand.
I learned a lot...
