What is Variance?
Variance measures how far each number in a dataset is from the mean. It is the square of the standard deviation. Variance gives more weight to outliers because differences are squared.
Population Variance σ² = Σ(xᵢ − μ)² / N
Sample Variance s² = Σ(xᵢ − x̄)² / (N−1)
Sample Variance s² = Σ(xᵢ − x̄)² / (N−1)
Variance vs Standard Deviation
- Variance = Standard Deviation²
- Variance is in squared units; SD is in original units
- SD is more interpretable; variance is used in calculations