Correlation vs Causation: Understanding The Difference


Correlation and Causation are two interrelated concepts that have unique characteristics. It is crucial to comprehend their dissimilarities to assess and interpret scientific research accurately. This write-up will first discuss correlation and Causation separately and then compare the two concepts.


Correlation is a statistical term used in analytics to denote a connection between two variables such that a change in one variable leads to a change in the other. However, it is important to keep in mind that this relationship may not necessarily indicate a direct or indirect causal connection between the variables. The three primary types of correlations are positive, negative, and none. Positive correlation arises when two variables change in the same direction, negative correlation occurs when they move in opposite directions, and no correlation occurs when there is no noticeable connection between the variables. For example, in summer, with increasing temperatures, ice cream and swimsuit sales rise. Despite having a positive correlation, these two variables lack a direct cause-and-effect relationship. Instead, the temperature rise independently influences both variables, resulting in their positive correlation.

Understanding the difference between correlation and Causation in analytics is important to avoid drawing erroneous conclusions from statistical analysis. By understanding the different types of correlations, analysts can more effectively interpret and evaluate data and make informed decisions based on the results.


In the field of analytics, causation refers to a connection between two variables in which one variable depends on the other, implying a cause-and-effect connection. This connection involves an independent variable, which brings about a change in the dependent variable. In the earlier example discussed, ice cream and swimsuit sales show a positive correlation during summer due to higher temperatures. Nonetheless, the temperature has a causal relationship with both variables independently. With an increase in temperature, more people purchase ice creams, and with an increase in temperature, more people purchase swimsuits.

This illustrates the concept of Causation, where the independent variable (temperature) causes a change in the dependent variables (ice cream and swimsuit sales). It is important to note that Causation is not always easy to establish, as multiple factors can influence a dependent variable, making it difficult to pinpoint the exact cause.

Understanding Causation in analytics is critical for making informed decisions based on data analysis. By identifying causal relationships, analysts can isolate the factors that drive specific outcomes, which can inform strategies for improving business performance or addressing problems in other fields.

Difference Between Correlation And Causation

The relationship between correlation and causation can be exemplified by the fact that correlation does not necessarily imply causation, while causation always implies correlation. Correlation refers to a statistical relationship between variables without indicating a causal link between them. In contrast, causation refers specifically to a cause-and-effect relationship, where a change in one variable causes a change in the other. Variables that have a casual relationship are always correlated, meaning that causation indicates correlation. However, correlation alone does not necessarily indicate causation because variables can be related without causing each other. In summary, correlation denotes a relationship between variables without necessarily indicating causation, while causation implies a specific relationship where one variable causes a change in another. While causation implies correlation, correlation doesn’t necessarily imply causation.

Correlation does not Imply Causation

There are several reasons why it is not appropriate to infer Causation based on correlation:

Variables based solely on their correlation. There are several challenges in establishing a causal relationship between two variables. One of them is the third/confounding variable, where a third variable may influence both variables and create an illusion of a cause-and-effect relationship. Directionality issues may also arise, making it difficult to determine which variable is the independent variable (the cause) and which is the dependent variable (the effect). In such cases, it is inappropriate to infer causation. Another issue is the chain reaction effect, where multiple variables may affect the correlation between the studied variables, indicating an indirect relationship between them. In conclusion, it is essential to understand that correlation does not necessarily imply causation. These issues, including third variables, directionality issues, and chain reactions, illustrate why establishing a cause-and-effect relationship based solely on correlation can be challenging.

FAQs on Correlation and Causation

Q: What is correlation? 

A: Correlation is a statistical measure that shows how two variables are related. This doesn’t necessarily indicate a cause-and-effect relationship between the variables.

Q: What is Causation? 

A: Causation refers to the association between two variables where the occurrence or value of one variable influences or brings about a change in the other variable.

Q: Can correlation imply Causation? 

A: Correlation can suggest the possibility of a causal relationship, but it cannot prove Causation.

Q: What is the difference between correlation and Causation? 

A: A correlation denotes a connection between two variables, but it does not necessarily suggest a cause-and-effect relationship between them. Causation indicates a specific type of relationship in which one variable causes the other to change.

Q: What are some limitations of correlation analysis? 

A: Correlation analysis can be limited by confounding variables, directionality issues, and chain reactions, making it difficult to establish a causal relationship between variables.

Q: How can we establish Causation? 

A: Establishing Causation requires demonstrating that one variable causes the other to change, ruling out alternative explanations, and establishing a temporal relationship between the variables.

Q: Why is it important to distinguish between correlation and Causation? 

A: Distinguishing between correlation and Causation is important because it can help avoid making false assumptions about the relationship between variables and can help ensure that decisions are based on accurate and reliable information.

Author Bio: Mark Edmonds is an experienced academic writer at Academic Assignments, specializing in providing MBA assignment help. With a passion for teaching and a deep understanding of data analysis, he provides students with top-notch statistics assignment help. Mark’s expertise in the field ensures that students receive the highest quality of work, making their academic journey easier and more successful.