standard deviation

Standard deviation is a measure of the deviation of the average value of a set of data. The standard deviation is large, indicating that most of the values are quite different from their average values; A smaller standard deviation means that these values are closer to the average.

For example, the average values of {0,5,9, 14} and {5,6,8,9} are all 7, but the standard deviation of the second group is smaller.

The standard deviation of extended data is applied to investment, which can be used as an index to measure the stability of income. The greater the standard deviation, the higher the risk, because the income is far from the past average. On the contrary, the smaller the standard deviation, the more stable the income and the less the risk.

For example, six students in Group A and Group B all took the same Chinese exam. Group A scored 95, 85, 75, 65, 55, 45, and Group B scored 73, 72, 765, 438+0, 69, 68, 67. The average score of the two groups is 70, but the standard deviation of group A is about 17.08, and that of group B is about 2. 16, which shows that the gap between students in group A is much larger than that of students in group B. ..

If it is a population (estimated population variance), the root sign is divided by n (corresponding to excel function: stdevp);

In the case of sampling (that is, estimating the variance of the sample), divide by (n- 1) within the root sign (corresponding to excel function: stdev);

Because we are exposed to a large number of samples, we usually use root division (n- 1).

Baidu encyclopedia-standard deviation