How to calculate covariance in excel

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    The variance is a way to measure the spread of values in a dataset.

    The formula to calculate population variance is:

    σ2 = Σ (xi – μ)2 / N

    where:

    • Σ: A symbol that means “sum”
    • μ: Population mean
    • xi: The ith element from the population
    • N: Population size

    The formula to calculate sample variance is:

    s2 = Σ (xi – x)2 / (n-1)

    where:

    • x: Sample mean
    • xi: The ith element from the sample
    • n: Sample size

    We can use the VAR.S() and VAR.P() formulas in Excel to quickly calculate the sample variance and population variance (respectively) for a given dataset. 

    The following examples show how to use each function in practice.

    Example 1: Calculating Sample Variance in Excel

    The following screenshot shows how to use the VAR.S() function to calculate the sample variance of the values in column A:

    The sample variance turns out to be 35.2079.

    Example 2: Calculating Population Variance in Excel

    The following screenshot shows how to use the VAR.P() fun

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