Mean Variance Calculator

Calculate Mean Variance

Formula

The formula to calculate the Mean Variance is:

\[ V = \frac{\sum{(x - \mu)^2}}{N} \]

Where:

What is Mean Variance?

Mean variance is a statistical concept used in finance and investing that refers to the average of the squared deviations from the mean of a data set. It is a measure of the dispersion or spread in a distribution of data. In the context of investing, mean variance analysis is used to balance the risk and return in a portfolio.

Example Calculation

Let's assume the following data set:

Using the formula:

\[ \mu = \frac{2 + 4 + 6 + 8 + 10}{5} = 6 \]

\[ V = \frac{(2-6)^2 + (4-6)^2 + (6-6)^2 + (8-6)^2 + (10-6)^2}{5} = 8 \]

The Mean Variance (V) is 8.