Formulas for Variance and Covarince

rathod.rashmin
Posts: 1
Joined: Tue Sep 24, 2013 9:36 am

Formulas for Variance and Covarince

Postby rathod.rashmin » Tue Sep 24, 2013 9:53 am

Are the below formulas for Variance and Covariance true
σxy=1/n*Ʃ(X-µx)(Y-µy) =1/nƩXY – (µX*µY)
σ^2=1/n*Ʃ(X-µ)^2=1/n*Ʃ(X^2) - µ^2
Please advice on the last part of both formulas in perticular

pradeeppdy
Finance Junkie
Posts: 258
Joined: Thu Sep 20, 2012 3:42 pm

Formulas for Variance and Covarince

Postby pradeeppdy » Wed Sep 25, 2013 9:55 am

Yes the formulas are correct, And generally we use this when we have a large data set although we use another formula.


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