'covariance of observations (nobs_i, nobs_i)  (JP check)
Display (3.3) from Laird, Lange, Stram (see help(Unit))'

def _compute_S(self, D, sigma):

    self.S = ((np.identity(self.n) * (sigma ** 2)) + np.dot(self.Z, np.dot(D, self.Z.T)))
