Coefficient of Variation and Standard Deviation - Assignment Example

 The average is a good measure to represent data. However, the dispersion of values signifies the authenticity of mean or average. Generally, for a highly dispersed set of values, the mean is not a good representative measure.One of the measures of dispersion is a standard deviation. This most widely used measure describes the average distance of each value from the mean. Below is the formula for standard deviation.The stepwise narration of the process would be,1. Take out the difference between each value and mean by subtraction.2. Square each calculated difference value.3. Add up all the squared values.4. Divide the sum by n (size of sample) and take the square root of the quotient.

The higher the standard deviation, the greater would be the dispersion. However, the standard deviation cannot be used to compare the dispersion of two data sets with different expected values. The relative measure of dispersion for standard deviation is coefficient of variation. It is a better measure as it quantifies the dispersion in relation to the expected value. Coefficient of Variation = Standard Deviation / AverageHowever, in this case, the values for standard deviation are the same.