What Variance is
Variance is a measure of how dispersed the values of a data set are from the mean. It is used to measure the spread of a data set, and is calculated by taking the average of the squared differences from the mean.
Steps to calculate Variance:
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Calculate the mean of a given data set.
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For each data point in the set, subtract the mean from the data point and square the result.
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Sum all of the squared differences.
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Divide the sum by the number of data points in the set.
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The result is the variance.
Examples
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A variance analysis is used to compare actual performance to budgeted or expected performance.
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Variance analysis is often used in quality control to identify areas of production that need improvement.
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Variance analysis can be used to identify potential risks in a portfolio of investments.
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Variance is used to measure the spread of a data set, helping to identify outliers and trends.
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Variance is used to measure the volatility of a stock or other security over time.