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View Full Version : What is the formula for variance and standard deviation


shrimp
Mar 8, 2009, 09:51 AM
If I have the following information
(A) 5%, 10%, 15%, 4% = 5+10+15+4 = 34%
Sum 34%/4 Years = Average Return 8.5%

How do I find the Variance,
Standard deviation
Coefficient variation

Perito
Mar 8, 2009, 01:20 PM
Wikipedia has a whole section on standard deviation. The variance is the square of the standard deviation.

Standard deviation - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Standard_deviation)

Simply subtract the average from each value and square it. Add all of the squares and divide by (usually) 1 less than the number of items. In this case, divide by 3. You've now calculated the variance. Take the square root of the value and you have the standard deviation.