Variations on how to estimate sample noise covariance

From the covariance tutorial:

In inverse modeling, this is equivalent to assuming that noise is homoskedastic, and equivalent on all sensors. With this latter option, if data quality is not even on all electrodes, a higher noise level on some sensors may be explained with stronger, spurious source activity.

As such computing from recordings and using only the diagonal takes into account the differences in noise level in the sensors. These are some post that you may find interesting: