Covariance

Covariance is a statistic that is used to express the relationship between two random variables. The Covariance measures the simultaneous variation of two variables from their respective means. A positive sign (+) on a Covariance indicates a direct relationship while a negative sign (-) indicates an inverse relationship. Interpretation of Covariance is impossible when variables have two different scales. In this case, Coefficient of Correlation should be used.

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