> For the complete documentation index, see [llms.txt](https://wpahelp.windhamlabs.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://wpahelp.windhamlabs.com/expected-risk/covariance.md).

# Covariance

The covariance of two assets is the standard deviations of the two assets multiplied by their correlation coefficient.

Combinations of assets with low covariance to other assets will result in portfolios with lower levels of portfolio risk. Combinations of assets with high covariance to other assets will result in portfolios with higher levels of portfolio risk.