Calculating covariance between two columns of data

Welcome People, Bots & Algo’s of LinkedIn. This is the Thursday Edition of The Analyst, In Todays edition we discuss Calculating covariance between two columns of data.

When you have two set of values that you think might be related one of the ways to trust the relation is to calculate the covariance.

The Dataset

???????? Column 1

???????? Column 2

I want to check the covariance between column1 column2, Covariance measures the deviation of each value in a column from the average of the column.

So for example in column one 1 if the average of the column is 4 the value of A2 would be 3 or -3 depends how you calculate it.

The same calculate would be done for column 2 then multiple the both of them to get the covariance. By finding the pair values for column 1 and 2

Once each pair value has been found you get the average of all the pair values and that’s the covariance for?

Covariance Formula

Covariance Answers

The Short way

Excel Covariance Formula

Excel Covariance Answer