Hebbian learning in cortical networks during development and adulthood relies on the presence of a mechanism to detect correlation between the presynaptic and the postsynaptic spiking activity. Recently, the calcium concentration in spines was experimentally shown to be a correlation sensitive signal with the necessary properties: it is confined to the spine volume, it depends on the relative timing of pre- and postsynaptic action potentials, and it is independent of the spine’s location along the dendrite. NMDA receptors are a candidate mediator for the correlation dependent calcium signal. Here, we present a quantitative model of correlation detection in synapses based on the calcium influx through NMDA receptors under realistic conditions of irregular pre- and postsynaptic spiking activity with pairwise correlation. Our analytical framework captures the interaction of the learning rule and the correlation dynamics of the neurons. We find that a simple thresholding mechanism can act as a sensitive and reliable correlation detector at physiological firing rates. Furthermore, the mechanism is sensitive to correlation among afferent synapses by cooperation and competition. In our model this mechanism controls synapse formation and elimination. We explain how synapse elimination leads to firing rate homeostasis and show that the connectivity structure is shaped by the correlations between neighboring inputs.