Variance
Definition
Variance describes the mean squared deviation of values from their mean.
Deviations are squared and averaged according to the chosen calculation rule. Its unit is therefore the square of the original unit; the standard deviation is the square root of the variance.
Simply explained
Like a measure of how far measurements are spread around their common center.
Why it matters in practice
Average values can be supplemented with information about fluctuations.
Example from business
Hypothetical example: A team compares the dispersion of delivery times of two processes.
Limits and pitfalls
- Outliers have a strong effect due to squaring; sample and population variance use different denominators.
Origin & history
Variance is a fundamental measure in probability theory and statistics.
Use in mid-sized companies
- Investigate fluctuations in process times, measurement data, and model errors.
Frequently asked questions
Can variance be negative?
No, it is based on non-negative squared deviations.
Sources
- numpy.var · NumPy: numpy.var –
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