Varianz (EN)

Definition

Variance is a measure of dispersion that indicates the average squared deviation of data points from the arithmetic mean. A higher variance value indicates greater data dispersion. Since variance is expressed in the square of the original unit, the standard deviation is often used as a better aid for interpretation.

Calculation

flowchart TD     A[Data points x₁, x₂, ..., xₙ] --> B[Calculate mean μ]     B --> C[Deviation of each data point from the mean: xᵢ - μ]     C --> D[Square the deviations: (xᵢ - μ)²]     D --> E[Average the squared deviations: σ² = Σ(xᵢ - μ)² / n]     E --> F[Result: Variance σ²] 

In Context

• Typically used together with mean, standard deviation, and covariance
• Related to: Standard deviation, Dispersion, Normal distribution
• Example use: Evaluation of risk dispersion in financial portfolios