Covariance

Covariance is a measure of the joint variability of two random variables.

The formulas for sample and population covariance differ, but they won't be explored in detail here. This chapter focuses on the covariances of the following dataset:

Store_ID: the unique id of the store;
Store_Area: the area of the store;
Items_Available: the number of items that are available in the store;
Daily_Customer_Count: the daily number of customers in the store;
Store_Sales: the number of sales in the store.

Calculating Covariance with Python

To compute covariance in Python, use the np.cov() function from the NumPy library. It takes two parameters: the data sequences for which you want to calculate the covariance.

The result is the value at index [0,1]. This course won't cover the other values in the output, refer to the example:


              123456789
            
import pandas as pd 
import numpy as np

df = pd.read_csv('https://codefinity-content-media.s3.eu-west-1.amazonaws.com/a849660e-ddfa-4033-80a6-94a1b7772e23/update/Stores.csv')

# Calculating covariance 
cov = np.cov(df['Store_Area'], df['Items_Available'])[0,1]

print(round(cov, 2))

This indicates that the values move in the same direction. This makes sense because a larger store area corresponds to a greater number of items. One significant drawback of covariance is that the value can be infinite.

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Section 4. Chapter 1

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Course Content

Learning Statistics with Python

1. Basic Concepts

Sample vs Population Types of Statistics Types of Data Mean Value Median Value Median Value of the Even Number of Values Mean or Median Mode Value Descriptive Statistics Quiz

2. Mean, Median and Mode with Python

Examine the Dataset Calculating Mean and Median Values with Python Statistics with pandas Calculate the Mean and Median Salary

3. Variance and Standard Deviation

Population Variance Sample Variance Calculate Variance with Python Standard Deviation Standard Deviation with Python Calculating Variance and Standard Deviation

4. Covariance vs Correlation

Covariance Correlation Covariance and Correlation Quiz Calculate Covariance and Correlation

5. Confidence Interval

6. Statistical Testing

What is t-test Hypotheses t-test Mathematically One-Tailed And Two-Tailed Test t-test Assumptions Performing a t-test in Python Conduct a t-test Paired t-test