Microsoft Office Tutorials and References

In Depth Information

**Deviating from the Middle**

A negative result means there is an
inverse correlation.
As one set of data

goes up, the other goes down. The actual negative value tells to what degree

the inverse correlation is. A value of –1 means the two sets of data move

perfectly in opposite directions. A value of –0.5, for example, means the two sets

move in somewhat opposite directions.

The CORREL function returns a value between –1 and 1. A positive value

means the two data sets move in the same direction. A negative value means

the two sets of data move in opposite directions. A value of 0 means there is

no relation between the sets of data.

Figure 9-13 shows three correlation results. The correlations display how

customers reacted (as a percentage increase in sales) with regard to three

types of advertising. All three advertising campaigns show a positive

correlation. As more money is spent on advertising, customer responsiveness

increases (or at least doesn’t reverse its direction).

Figure 9-13:

Comparing

the

results of

advertising

campaigns.

All three returned correlation values fall within the range of 0 to 1 and,

therefore, are easy to compare with each other. The evidence is clear — direct

mail is not as efficient as magazine or radio advertising. Both the magazine

and radio advertising score high; the returned values are close to 1. However,

direct mail returns a correlation of 0.4472. A positive correlation does exist —

that is, direct-mail expenditures create an increase in customer

responsiveness. But the correlation is not as strong as magazine or radio advertising.

The money spent on direct mail would be better spent elsewhere.