Correlation measures the strength and direction of association between two variables. It ranges from -1 to 1, where 0 indicates no association and values closer to 1 or -1 indicate stronger positive or negative associations, respectively. The document provides examples of positive correlation between variables such as height and weight that increase together, and negative correlation where variables such as TV time and grades move in opposite directions. Formulas and different types of correlation including partial and multiple correlation are also defined in the document.