Variance/Covariance/Correlation Exercise

NAME

First, do all the following in this Excel spreadsheet. Then, replicate these results on paper, doing all the calculations
except the squares, crossproducts, and column sums by "hand," i.e., use a calculator.
For simplicity, treat the data as a population.

1 Compute the squares and crossproducts columns as indicated below. Sum each column using the =SUM function. Rem
the Excel symbol for multiplication is *, e.g., =A1*A2; for an exponent it's ^, e.g., =A1^2
2 Name each of these column sums ( sum of x2 in cell F39, etc.) using the name box at the upper left. You can use the ran
NOTE 1: I've already named the data for variables x, y, and z those range names, e.g., range C31.C40 is named
like sumx, etc.
NOTE 2: Don't name cells anything like x2; Excel will think you're referring to cell x2. Use something like
NOTE 3: While you're at it, create cells with the number of observations (n), mean of x, mean of y, and mean of z in them
Put them anywhere convenient. You'll need these to do the calculations in parts 4 & 7. You might also want to store th
Complete
the first variance/covariance matrix, labeled 1, using the Excel formulas for variance (=VARP) and covariance
3

4 Complete the second variance/covariance matrix, labeled 2, using the column sums from part 1 above and the variance
sum-of-squares/crossproducts formulas, i.e., don't use the Excel =COVAR and =VARP functions.
Complete
the first correlation matrix, labeled 1, using the Excel formulas for correlation (=CORREL).
5

6 Complete the second correlation matrix, labeled 2, using the variance/covariance matrix from part 4 above. Remember
Excel function for a square root is =SQRT. Alternatively, and I think easier, is just to raise the value to the 1/2 power,
(Optional,
and not for the faint of heart) Complete the third correlation matrix, labeled 3, using the column sums from pa
7

8
9
10
11
12

don't use the variance/covariance matrix.

OK--Now the fun part--do parts 8 - 10 on paper. Use a calculator.
Construct the variance/covariance matrix on paper. Show all work.
Now, construct the correlation matrix on paper, using the variance/covariance matrix. Show all work.
Confirm your result in part 9 by constructing the correlation matrix WITHOUT referring to the variance/covariance matrix.
Now in Minitab-Last, copy and past the x, y, and z variables into Minitab and construct the variance/covariance and correlation matrices.
Check your work. Verify that all your calculations match up.

i
1
2
3
4
5
6
7
8
9
10
Sums

x
81
56
44
67
55
77
96
51
44
15

y
94
17
40
32
15
90
84
85
46
58

z
15
33
12
38
38
22
19
16
17
31

x2

y2

z2

xy

xz

1 =

2 =

1 =

2 =

DATE

ng all the calculations

using the =SUM function. Remember that

upper left. You can use the range names in the formulas that follow.
ange C31.C40 is named x. You'll have to name the sums of these 3 columns something else,

e something like xx instead.

mean of y, and mean of z in them, using the =COUNT and =AVERAGE functions.
You might also want to store the standard deviations of x, y, & z for part 4; use =STDEVP.
iance (=VARP) and covariance (=COVAR).

m part 1 above and the variance/covariance

from part 4 above. Remember that the

aise the value to the 1/2 power, e.g., =A1^.5

using the column sums from part 1 above, i.e.,

he variance/covariance matrix. Show all work.

iance and correlation matrices. (This part is too easy.)

yz

3 =

count

x
1
2
3
4
5
6
7
8

sum
count
average
variance
standard deviation

10
9
9
8
8
8
8
6
66
8
8.25

x-mean
(x-mean)^2
1.75
3.0625
0.75
0.5625
0.75
0.5625
-0.25
0.0625
-0.25
0.0625
-0.25
0.0625
-0.25
0.0625
-2.25
5.0625
0
9.5
8
8
1.357143
1.164965

data set 1 data set 2

-10
8
0
9
10
10
20
11
30
12
average
range
variance of a population
variance of a sample
standard deviation of a population
standard deviationof a sample

10
10
40
4
200
2
250
2.5
14.14214 1.414214
15.81139 1.581139

Compatibility Report for vcovmat.xls

Run on 9/15/2016 12:23
If the workbook is saved in an earlier file format or opened in an earlier version
of Microsoft Excel, the listed features will not be available.
Significant loss of functionality
One or more functions in this workbook are not available in earlier versions of
Excel. When recalculated in earlier versions, these functions will return a
#NAME? error instead of their current results.

# of occurrences
4

Sheet3'!B10:B11
Sheet3'!E10:E11

Version

Excel 97-2003
Excel 2007