How to Use the Fisher Transformation in Excel

Use FISHER and FISHERINV to put a confidence interval on a correlation and to average correlations correctly.

You will learn to

• Transform a correlation with FISHER
• Build a lower confidence limit for a correlation
• Average several correlations correctly

How it works

Correlations are squeezed between −1 and 1, which makes their sampling error lopsided and averages misleading. The Fisher transformation, FISHER(r), stretches r onto a scale where it is roughly normal with standard error 1/√(n−3). Do your maths there, then convert back with FISHERINV.

That gives an honest confidence interval for a correlation — for example, how low the link between ad spend and sales could really be — and a better way to combine correlations from several regions than simply averaging them.

=FISHER(0.62)