I'm trying to wrap my head around the variance, covariance and correlation. I'm clear on the formulas in their basic forms. However, confused as to why the portfolio variance formula is:$$Std^2=(W_a^2)(Std_a^2)+(W_b^2)(Std_b^2)+(2)(W_a)(W_b)(Cov_{a,b}).$$Whereas Variance in stats is:$$Std^2=\sum \frac{(x-mean)^2}{n}.$$Is this because it measures two variances?
2026-04-04 10:23:08.1775298188
Why is the variance formula different to the portfolio variance formula?
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