Covariance function excel

What is the Covariance Excel Function? The Covariance[1] Excel function is categorized under Statistical functions. It calculates the joint variability of two random variables, given two sets of data.

1. How does covariance function work?
2. How to do covariance and correlation in Excel?
3. How do you calculate COV XY?

How does covariance function work?

Covariance is calculated by analyzing at-return surprises (standard deviations from the expected return) or by multiplying the correlation between the two random variables by the standard deviation of each variable.

How to do covariance and correlation in Excel?

The function code for covariance is =covar(array1,array2), where the arrays are the columns of data for the individual variables. Don't forget all functions start with an = sign and have the arrays separated by a comma inside parenthesis. Similarly, the function code for correlation is =correl(array1,array2).

How do you calculate COV XY?

The covariance between X and Y is defined as Cov(X,Y)=E[(X−EX)(Y−EY)]=E[XY]−(EX)(EY).