Clarification about Octave data size limit
You have about 4GB of RAM on your machine and Octave is an in memory application. 

If you want to work with 515345 instances and 4275 features, assuming that you are using double precision (i.e. 8 bytes), you would need a memory of 515345*4275*8/1000000/1024 bytes ~ 17.6 GB. Even if you were using 4 bytes for each data point, you would require at least 9 GB for the computation to go through. 

This issue might not be the Octave memory restriction in this case. See here for further details on Octave's memory usage.