How to calculate covariance in excel 2007

Written by dan howard
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How to calculate covariance in excel 2007
Excel 2010 replaced the COVAR function with the COVARIANCE.P and COVARIANCE.S functions. (Polka Dot RF/Polka Dot/Getty Images)

Excel 2007 includes many functions that you can use to calculate the statistical properties of arrays of data. One such statistical measure is covariance, a measure of the degree to which two variables change in unison; two variables that are highly dependent on one another have high covariance, while two variables that are independent have a covariance of zero. Use Excel's COVAR function to calculate the covariance of a pair of variables that have an equal number of data points.

Skill level:
Easy

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Instructions

  1. 1

    Run Microsoft Excel 2007 and open the workbook that contains your data arrays.

  2. 2

    Determine the cell addresses for your two arrays. For example, if your arrays are contained in the first 10 columns of rows A and B, then the cell addresses for those arrays are A1:A10 and B1:B10.

  3. 3

    Click a blank cell that you would like to use to display the covariance between your data arrays.

  4. 4

    Type the following in the cell:

    =COVAR(A1:A10,B1:B10)

    Substitute the cell addresses for your two data arrays in place of the sample addresses in the example.

  5. 5

    Press "Enter." The cell displays the covariance between the two data arrays.

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