👉 Covariance refers to a measure of how two or more variables change together. It is used in statistics and econometrics, particularly when analyzing data from multiple observations across different time periods. The covariance between two variables A and B represents the percentage by which one variable changes in relation to the other. For example, if A and B are both height measurements for a group of people (A = 160 cm, B = 170 cm), then their covariance would be calculated as
