In finance, risk of investments may be measured by calculating the variance and standard deviation of the distribution of returns on those investments. Variance measures how far in either direction the amount of the returns may deviate from the mean.
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1. Standard deviation is not a measure of variance: it is the square root of the variance.2. The answer depends on better than WHAT!
One definite drawback is that it is usually derived based on historical data and does not take into account future factors.
How do we calculate variance
The standard deviation is the value most used. Others are variance, interquartile range, or range.
the variance