Covariance Calculator

Calculate how two variables change together with sample and population covariance

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Quick Examples:

X Variable X Values

Y Variable Y Values

Sample Covariance Formula:

Cov(X,Y) = Σ[(xi - x̄)(yi - ȳ)] / (n - 1)

Sample Covariance

Sample Covariance

Cov (n-1)

Population Covariance

Cov (N)

Correlation (r)

Sample Size (n)

Data pairs

Variable X Statistics

Mean (x̄)
Std Dev (σₓ)

Variable Y Statistics

Mean (ȳ)
Std Dev (σᵧ)
i xi yi xi - x̄ yi - ȳ (xi - x̄)(yi - ȳ)

Showing first 20 of data pairs

Correlation Strength Guide

|r| Value Strength Interpretation
0.9 – 1.0 Very Strong Almost perfect linear relationship
0.7 – 0.9 Strong High degree of linear relationship
0.5 – 0.7 Moderate Noticeable linear relationship
0.3 – 0.5 Weak Slight linear relationship
0 – 0.3 Very Weak Little to no linear relationship

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About Covariance Calculator

What is Covariance?

Covariance is a statistical measure that quantifies the extent to which two random variables change together. It indicates the direction of the linear relationship between variables.

Interpretation:

  • Positive covariance: Variables tend to move in the same direction
  • Negative covariance: Variables tend to move in opposite directions
  • Zero covariance: No linear relationship exists

Covariance Formulas

Sample Covariance

For a sample of n observations:

Cov(X,Y) = Σ[(xᵢ - x̄)(yᵢ - ȳ)] / (n - 1)

Population Covariance

For an entire population:

Cov(X,Y) = Σ[(xᵢ - μₓ)(yᵢ - μᵧ)] / N

Where:

  • xᵢ, yᵢ = Individual data values
  • x̄, ȳ = Sample means
  • μₓ, μᵧ = Population means
  • n, N = Number of data points

Relationship to Correlation

Covariance is related to the Pearson correlation coefficient:

ρ(X,Y) = Cov(X,Y) / (σₓ × σᵧ)

Correlation standardizes covariance to a value between -1 and +1, making it easier to interpret the strength of the relationship.

When to Use Covariance

  • Portfolio Analysis: Measure how assets move together
  • Research Studies: Identify relationships between variables
  • Data Science: Feature selection and dimensionality reduction
  • Economics: Analyze economic indicators

Limitations of Covariance

  1. Not standardized: The value depends on the scale of variables
  2. Only linear relationships: Doesn't capture nonlinear associations
  3. Sensitive to outliers: Extreme values can distort results

Frequently Asked Questions

What's the difference between sample and population covariance?

Sample covariance divides by (n-1) to correct for bias, while population covariance divides by N. Use sample covariance when working with a subset of data.

Can covariance be greater than 1?

Yes! Unlike correlation, covariance is not bounded. Its magnitude depends on the units and scale of your variables.

Should I use covariance or correlation?

Use correlation when comparing relationships across different scales. Use covariance when the actual magnitude matters (e.g., financial calculations).