# Variance And Standard deviation in Python

**Variance**

Measurement of spread of between numbers in a data set. That is,it measures how far each number in the data set from mean and therefore from other numbers in the set

**Key Takeaways**

- In investing, variance is used to compare the relative performance of each asset in a portfolio.
- Because the results can be difficult to analyze, standard deviation is often used instead of variance.
- In either case, the goal for the investor is to improve asset allocation.

# How to Use Variance

Variance measures variability from the average or mean. To investors, variability is volatility, and volatility is a measure of risk. Therefore, the variance statistic can help determine the risk an investor assumes when purchasing a specific security.

A large variance indicates that numbers in the set are far from the mean and from each other, while a small variance indicates the opposite.

**Variance and Standard deviation in Python**

**Standard Deviation**

The standard deviation is a statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance.

# Key Takeaways

- Standard deviation measures the dispersion of a dataset relative to its mean.
- A volatile stock has a high standard deviation, while the deviation of a stable blue-chip stock is usually rather low.
- As a downside, it calculates all uncertainty as risk, even when it’s in the investor’s favor — such as above average returns.