Definition of «variance»

Usage examples

1. Calculating the variance in a dataset: The first step in calculating variance is to find the mean or average of the set. Then, for each data point, subtract the mean and square the result. Finally, sum up all the squared differences and divide it by the total number of data points to obtain the variance.
2. Variance in finance: In the context of investing, variance is used as a measure of how spread out the returns of an investment are. A higher variance indicates a wider range of potential returns, suggesting greater volatility and risk associated with the investment.
3. Variance in statistics: Variance is a statistical concept that measures the degree of dispersion or variability in a set of data points. It provides insights into how much individual data points differ from the average or mean. A lower variance suggests that the data points are more tightly clustered around the mean, whereas a higher variance indicates more scattered or dispersed data points.
4. Analysis of variance (ANOVA): ANOVA is a statistical technique used to compare means across two or more groups. It analyzes the variance between the group means and within each group to determine if there are significant differences in the population means.
5. Variance in quality control: In the field of manufacturing, variance is used to assess the consistency and quality of products. By measuring the variance in product dimensions, attributes, or performance, manufacturers can identify any deviations from desired specifications and take corrective actions to improve quality control processes.