Presented by:

Farhan Zamir
19-MS-ME-AMD-17

Presented to:
Dr. Nazeer Ahmad Anjum
Measures of
Variability
Outlines
1. Range
2. Variance
3. Standard Deviation
4. Coefficient of Variation
5. Covariance
6. Interpretation of
Covariance
MEASURES OF VARIABILITY: RANGE

 We turn now to discussion of some commonly used

measures of variability.
 Simplest measure of variability

Range = Largest Value – Smallest Value

 3310 3355 3450 3480 3490 3520 3540 3550 3650 3730
3925

Highly influenced by extreme values

MEASURES OF VARIABILITY: VARIANCE

 The variance is a measure of variability that utilizes

all the data.
 It is based on the difference between the value of
each observation (xi) and the mean (x for a sample, m
for a population).
 The difference between each xi and the mean is called
the deviation about the mean (xi-x).
MEASURES OF VARIABILITY: VARIANCE
 The variance is the average of the squared differences
between each data value and the mean.
 If the data set is a sample, the variance is denoted by
s2 .
2
( xi x )
s2 
n1
 If the data set is a population, the variance is denoted
by  2.
2
2 (xi )
 
N
VARIANCE: EXAMPLE

VARIANCE ?
Be careful with the units and understanding of variance. To
be used in comparison of two variables.
VARIANCE: EXAMPLE
MEASURES OF VARIABILITY: STANDARD
DEVIATION
 The standard deviation of a data set is the positive
square root of the variance.
 It is measured in the same units as the data, making it
more easily comparable, than the variance, to the
mean.
 If the data set is a sample, the standard deviation is
denoted s.
s  s2
 If the data set is a population, the standard deviation
is denoted  (sigma).
  2
Calculate standard deviation of the two examples
COEFFICIENT OF VARIATION
 The coefficient of variation indicates how large the
standard deviation is in relation to the mean.
 If the data set is a sample, the coefficient of variation
is computed as follows:
s
(100)
x
 If the data set is a population, the coefficient of
variation is computed as follows:

(100)

 COVARIANCE
 We introduce covariance as a descriptive measure of the
linear association between two variables.
 For a sample of size n with the observations (x1, y1), (x2,
y2), and so on, the sample covariance is defined as follows:

 This formula pairs each xi with a yi. We then sum the

products obtained by multiplying the deviation of each xi
from its sample mean by the deviation of the corresponding
yi from its sample mean ; this sum is then divided by (n-1).
COVARIANCE: EXAMPLE
SAMPLE DATA FOR THE STEREO AND SOUND
EQUIPMENT STORE
COVARIANCE: EXAMPLE
Scatter Diagram
COVARIANCE: EXAMPLE
Calculation for the Sample Covariance
Continue…
 The formula for computing the covariance of a population of
size N is similar to the sample, but we use different notation
to indicate that we are working with the entire population.

 In the above equation we use the notation μx for the

population mean of the variable x and μy for the population
mean of the variable y. The population covariance σxy is
defined for a population of size N.
INTERPRETATION OF COVARIANCE
Three different types of scatter diagrams
 Continue…

Partitioned
scatter diagram
for the stereo
and sound
equipment
store
 Reference

 ‘Statistics for Business and Economics’ by Anderson

Sweeney Williams.