# Covariance

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Related to Covariance: Covariance matrix

## Covariance

A statistical measure of the degree to which random variables move together. A positive covariance implies that one variable is above (below) its mean value when the other variable is above (below) its mean value.

## Covariance

The degree to which two variables are correlated. That is, covariance is the measure of how much two variables are related to one another. It is important in security analysis to determine how much or how little price movements in two companies or industries are connected.

## covariance

A statistical measure of the extent to which two variables move together. Covariance is used by financial analysts to determine the degree to which return on two securities is related. In general, a high covariance indicates similar movements and lack of diversification. Compare variance. See also risk.
References in periodicals archive ?
To measure how ecosystems exchange carbon and water with the atmosphere, Fluxnet stations rely on state-of-the-art micrometeorological tools and a standard method, called the eddy covariance method.
were defined by the equation [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] The estimates of genotypic covariance for the month t were described [MATHEMATICAL EXPRESSION NOT REPRODUCIBLE IN ASCII] where i = 5, 6, .
4th, 5th and 6th degrees of AR parameters were estimated by covariance and Yule-walker methods for the EGG signals of patients and healthy people for fasting and satiety stages (for both channels).
For the characterization of an unbounded covariance, we have to consider functional digraphs.
T] represents the noise signal vector, which is assumed to be a zero-mean complex random vector with a covariance matrix of [?
In the study, we tested the suitability of homogenous and heterogeneous covariance structures between repeated measurements of data concerning laying hens, and evaluated the effect of adding some covariates in quality criteria of RISM where a time effect was specified as a continuous variable.
Several covariance structures are found in the literature, where the G and [R.
Since there is no correlation between measurement errors and signals, the total covariance matrix of the observations in the LSC model is obtained by the sum of the covariance matrices of the signal and the noise.
Following the estimated state, the covariance matrix of the estimate is given by
Figure 4 plots a positive covariance between both indexes which hints that the euro has helped harmonized and stabilized the business cycle on both sides of the Atlantic.
Given the expected excess rate of return vector R - r on n risky securities and the non-singular covariance matrix [OMEGA] between n risky securities rate of returns, the portfolio [omega] in Equation (1) is the unique risky optimal mean-variance efficient within the mean-variance framework if and only if [omega] = [[OMEGA].

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