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    Hi Guys,

    Please could you let me know the difference between high co-variance and high correlation? I always get the two mixed up

    Thanks !
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    (Original post by vxq1)
    Hi Guys,

    Please could you let me know the difference between high co-variance and high correlation? I always get the two mixed up

    Thanks !
    If you have two random variables X and Y, then to get the correlation of X and Y, you divide the covariance of X and Y by the product of the standard deviation of X and the standard deviation of Y. In other words, correlation is a normalized version of covariance.
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    Covariance will show the connection between two variables (say weight and height) but the value will change according to the units used. E.g Grammes and cm will give a different result from kilogrammes and metres.
    By dividing by the sd of each of your variables you get a dimensionless version which is the same regardless of the measurement units used. This is the correlation.
 
 
 
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