What Does Variance Indicate?

The term variance refers to a statistical measurement of the spread between numbers in a data set. More specifically, variance measures how far each number in the set is from the mean and thus from every other number in the set.

How do you interpret variance?

The variance is the average of the squared differences from the mean. To figure out the variance, first calculate the difference between each point and the mean; then, square and average the results. For example, if a group of numbers ranges from 1 to 10, it will have a mean of 5.5.

What is considered high variance?

As a rule of thumb, a CV >= 1 indicates a relatively high variation, while a CV < 1 can be considered low. This means that distributions with a coefficient of variation higher than 1 are considered to be high variance whereas those with a CV lower than 1 are considered to be low-variance.