Correlation (from Latin “correlatio” – ratio) – is a numeric measure of the strength of linear relationship between two random variables.
According to the assignment I have calculated the correlation between between the retail online sales and total retail sales using the data from the indicated link in Excel (all the calculations are available in the appendix). According to my calculations the Pearson Correlation Coefficient equals 0.84. From the theories of probability and statistics I can conclude that the relationship between the items involved is increasing and linear, and is quite strong. These results may be interpreted in the following way: amount of retail online sales directly affects total retail sales; the more sales take place online – the more increases total amount of sales. According to these conclusions, bank should stimulate online sales by the means of promotion and advertisement, discount programs and so on.
Modern world of business is characterized by the pitiless competition and in order to survive and develop companies must provide very competitive, qualitative, customer driven and cheap goods and service. In order to comply with the above demands businesses have to continuously analyze different indicators, which may affect their business in some way, interpret the results and make corresponding decision.

As the first example of correlation evaluated in business environment I can adduce the following: when a company introduces a new motivational program for its employees, within a certain period of time the managers of the company may analyze its efficaciousness with the help of correlation analysis and hence decide if it is working and overall motivation of the employees is affected by this program or not, and in which degree. If this motivation program does not yield the desired result it should be cancelled, appreciably elaborated or the new one should be developed. If this program works fine then the company may introduce it in its subsidiaries and departments.
As the second example I want to adduce the following one: with the help of the correlation and regression, the company can be engaged into the forecasting. Let’s suppose that a business magazine introduced several new rubrics last year, within three next quarters its edition increased in a half and the income increased too. The magazine’s leadership was very surprised and decided to clear up which rubric attracts more readers, how it influences the income, how many readers will it attract within the next financial year and how it will increase the income. In the course of the investigation company collects data, analyzes it, makes excerpts, provides correlation-regression analysis and finally builds up the model, with the help of which the company may forecast its future income and edition etc.
Finally, I want to emphasize that the correlation is very important tool of statistics and is widely used in the business decision-making.

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