def _compute_S(self, D, sigma):
        self.S = (np.identity(self.n) * sigma**2 +
                  np.dot(self.Z, np.dot(D, self.Z.T)))
covariance of observations (nobs_i, nobs_i)  (JP check)
dataset/ETHPy150Open statsmodels/statsmodels/statsmodels/sandbox/panel/mixed.py/Unit._compute_S