Create Covariance matrix in Excel or covariance table in Excel

In this tutorial we will learn how to create covariance matrix in Excel or covariance table in Excel. Covariance is a measure of how much two random variables vary together. It’s similar to variance, but where variance tells you how a single variable varies, co variance tells you how two variables vary together.

Formula for covariance:

covariance matrix in Excel 1

Let’s use the marks of three subjects (which is shown below) to compute Covariance matrix in excel.

covariance matrix in Excel 2

 

Step 1: On the top right corner of the data tab click data analysis.

covariance matrix in Excel 3Note: if you can’t able to find the Data Analysis button? Click here to load the Analysis ToolPak add-in.

 

Step 2: Select Covariance and click ok.

covariance matrix in Excel 5

 

Step 3: Click in the Input Range box and select the range A1:C10, select the “Labels in first row” tick box and output range, as shown below and click ok

covariance matrix in Excel 6

The result will be

covariance matrix in Excel 7

We have successfully created covariance matrix in excel

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