Variance surrounds us. Despite our desire to have the same thing every day, we will face a slight variation of something we want to encounter again.

A mathematical definition of the variance is quite straight forward:

*it is a measure of how far are the data values are located from the mean*.

The **population ****variance** is defined as : , where is the population size (the number of values in the set), is a selected value, is the population mean (the average).

If we take Coca-Cola’s share price as an example and calculate the variance for all available data, we get .

The minimum, mean and maximum in the same data are .

The square root of the variance will give us a more firm view on the deviation from the mean and the spread of the data values: .

Information sources:

- An R introduction to statistics (link)
- StatisticsHowTo (link)

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