covariance estimation

Covariance estimation measures how two variables change together—whether they tend to increase or decrease together. For example, if taller people generally weigh more, their height and weight have a positive covariance. Estimating covariance involves analyzing data to quantify this relationship, helping us understand dependence between variables. Accurate covariance estimates are essential in fields like finance, to assess how different assets move relative to each other, or in science, to identify relationships between measurements. It provides a foundational understanding of how variables relate, guiding decisions and further analysis.