# What can covariance be used for?

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 ${\sigma}_{x y}$.