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Islanding detection is one of the most important R&D topics in the area of distributed generation (DG) interconnection with utility grid. For many years, different anti-islanding protection methods were developed and proposed for inverter based distributed generation. However, most of these methods have a limit for detecting islanding when multiple DGs have to be connected with one distribution line. In this paper, we present theoritical and simulation analyses of the correlation method. The principle of the correlation technique is presented and the method was investigated for different operating conditions. The critical case-studies show that this method is effective for both single and multiple grid connected systems. In addition, to improve the effectiveness of the correlation technique, a user-defined M-sequence was used to calculate the correlation function.