how to calculate variance of x and y?
What of the variance of the sum of two random variables? If you work through the algebra, you'll find that Var[X+Y] = Var[X] + Var[Y]+ 2∙(E[XY] - E[X]∙E[Y]) . Var[X+Y] = Var[X] + Var[Y] + 2∙Cov[X,Y] . Note that the covariance of a random variable with itself is just the variance of that random variable.