What can covariance be used for?
1 Answer
Nov 2, 2015
One use of co-variance is to study the correlation.
Explanation:
When we have sample data relating to two dependent variables, the co-variance becomes relevant.
Co-variance is a measure of the effect of variation between the two variables.
When we have two dependent variables say X and Y, we can study the variation within the values of X - this is#sigma_x^2#
the variation within the values of Y is the variance of y#sigma_y^2# .
The study of the simultaneous variation between X and Y is called COV(X,Y) or#sigma_(xy)# .
