The mean deviation is a measure of dispersion that calculates the average absolute difference between each data point and the mean. One advantage of mean deviation is that it considers every data point in the calculation, providing a more balanced representation of the data spread. However, a disadvantage is that it can be sensitive to outliers, as it does not square the differences like the variance does in standard deviation, making it less robust in the presence of extreme values.
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Well, honey, the advantage of mean deviation is that it gives you a quick and dirty measure of variability around the mean. But let me tell you, it can be a bit sensitive to extreme values, so if you've got some outliers causing a ruckus, it might not give you the full picture. Just keep that in mind, darlin'.
One the main advantage of using the coefficient of variation over the standard deviation to measure volatility is the fact that CV is normalized and can be used to directly compare different asset's volatility. The standard deviation must be used in the context of the mean of the data.
mean deviation =(4/5)quartile deviation
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The mean deviation from the median is equal to the mean minus the median.
No. The average of the deviations, or mean deviation, will always be zero. The standard deviation is the average squared deviation which is usually non-zero.