Covariance

Covariance is a value that measures the degree two variables change respect to their measures. With this value we can say if it exists a dependency between the variables.

The sign of the covariance depicts the relation between the variables:

  • A high positive value indicates the variables have a similar behaviour.

  • A lower negative value indicates the variables have an opposite behaviour.

  • A zero value indicates the variables are not related.

However, the covariance is not as easy to understand. For better interpretation we have to use a normalized version like correlation.

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