Kendall's Tau measures the correlation between two variables by comparing the number of concordant and discordant pairs. A pair of observations is concordant if the ranks for both variables agree, and discordant if they do not. The formula for Kendall's Tau is: τ = (C - D) / n(n-1)/2 where C is the number of concordant pairs, D is the number of discordant pairs, and n is the number of observations.