Constructing a Variance Covariance Matrix in Excel

This video shows you how to easily compute a sample variance/covariance matrix in Excel.
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[@richaghevarghese9974]

thank you, Ronald!! great video explanation

[@drew1298]

Great video! It helped me remember material from class a few years ago. I just started my CFA 1 prep. Do you have any help on how to interpret the data itself; what is it really telling the analyst aside from which assets have more/less correlated movement?

[@ryanyusyuen3147]

Hi Ronald， thanks for the explanation. As from my understand we can actually compute the covariance using the formula = correlation(a,b) * std deviation A * std deviation B. But I realise that the output of covariance is significantly different from the covariance output of the data analysis in excel. Can I know which one should I refer to?

[@zarpasuave]

Thank you so much for the video!!!!! Just a question, what is the reasoning behind the number for the sample? Amazing video

[@RonaldMoy]

It's a statistics thing that you lose a degree of freedom when calculating the mean. For those of us who are not statisticians, it doesn't seem all that meaningful.

[@zarpasuave]

@@RonaldMoy oh yeah degrees of freedom. It’s been a while since I did a task like this so I forgot. Thanks for the prompt reply! :D

[@rushb3161]

thank you so much !

[@samslauenwhite2498]

how did you calculate expected return

[@RonaldMoy]

I just took the average.

[@fnine4202]

Thank you!