One method of obtaining the power spectrum of a signal is via its correlation function. In the majority of VLF studies one is interested in signal spectrograms. In the past these have been produced by a variety of spectrum analyzers operating on the raw signal, while correlation techniques have rarely been used. It is shown in the present paper that the application of correlation analysis to VLF signals on board spacecraft has many advantages, not the least being a considerable decrease in the amount of data to be subsequently telemetered to the ground. The philosophy of the on-board correlator designed for the ESRO geostationary satellite GEOS is described in detail and its performance, tested by computer simulation studies, is compared with that of conventional ground-based spectrum analyzers. It is shown how such a correlator may be utilized for recognising VLF signal patterns in the presence of noise. This type of correlator is also useful for directly studying the Poynting flux of electromagnetic waves and for investigating the propagation characteristics of plasma waves. With minor modifications, the k-vector of electromagnetic waves may be directly determined.