Can the HP 12c calculate covariance?

CFA Level I
#1

Covariance is driving me nuts, is there any simple way to make the calculator do the work for you?

#2

I don’t know, but I will check the manual.

#3

or SD?

#4

no but it can do CORR and SD which can find COV

#5

corr? I know SD (for mean and pop) But corr?

#6

Here is a Covariance Shortcut: Work around it by calculating the Correlation and solving for the CoVariance r =COV(X,Y)/sx * sy COV(X,Y) = r * sx * sy Enter the Y’s and X’s Y1 “Enter” X1 “sigma+” Y2 “Enter” X2 “sigma+” Y3 “Enter” X3 “sigma+” Now calculate the sample std for x and y, “g” “s” “xy” “x” “STO” 0, this is your numerator so that gets you the sample std for x and y and then multiple the two, that 1 “ENTER” “g” “xhat,r” “x<>y” = r “RCL” 0 “x” = COV(X,Y) Problem Solved. Section 6 of HP handbook pg. 97 under linear estimation states that whether you estimate an X val or Y val, it automatically calculates the correlation by hitting X<>Y. Enjoy.

#7

A useful supplement to the HP12c user’s guide is the so called " Solutions Manual (can be downloaded from various links, such as the following below ) by authors Hutchins, Vieira and Wright

http://ebookbrowse.com/hewlett-packard-hp-12c-platinum-solutions-manual-pdf-d313863784

While Kedgar’s approach above certainly works, they suggest the following 8-key sequence [RPN] on p. 114 , which possibly works a tad quicker:

(after entering the data pairs with “y-value(n)” [Enter] “x-value(n)” [Sigma+]):

sample covariance (for population covariance, see the book):

[g (that is the blue key)] [(subscript) " s" - that is the decimal point key] [" x" - that is the multiplication key] [Enter]

[g] [(subscript) “y(head), r” - that is the “2” key]

[R(arrow down) - that is the key immediately above the blue g key] [x]

Enjoy

#8

isn’t it easier just to use correlation and the covariance formula from the book? I can’t imagine the test requires you to know how to calculate correlation without giving covariance or vice versus.