Covariance vs Correlation

In statistics, it is frequent that we come across these two term known as covariance and correlation.

But are they the same?

Not really.

Variance measures how far a set of numbers are spread out from their average value.

Variance

Standard deviation is a measure of the amount of variation or dispersion of a set of values.

Standard Deviation

The value of covariance between 2 variables is achieved by taking the summation of the product of the differences from the means of the variables as follows:

Covariance

The main result of a correlation is called the correlation coefficient.

Correlation