How to Calculate Variance
How to Calculate Variance | Formula
(1) A measure of variability or dispersion of a quantity, given as the average squared deviation of individual observations from the mean value in a distribution. Its square root is the standard deviation.
(2) A measure of the volatility of return, computed as an average squared deviation of return from the mean value. In Russell Performance Universes (RPU), variance is calculated as follows:
| Where | Equals |
|
| Variance |
| n | Number of observations |
| Ri | i-th return |
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