To find the standard deviation, simply take the square root of the variance. Someone might choose standard deviation over variance because it's a smaller number, which might be easier to work with and skewing is less likely to affect. Sometimes, professionals use variance and standard deviation interchangeably. Other professionals who might use variance are scientists, statisticians, mathematicians, data analysts and anyone responsible for identifying risk or determining information about the population of an experiment or sample. This helps asset managers and investors improve their investment performance. You can use variance in investing to determine the individual performance of the separate parts of an investment portfolio.
Related: Variance Analysis: Definition, Types, Formulas and Examples How is variance used? You can also use variance in statistical inferences, hypothesis testing, Monte Carlo methods (random sampling) and goodness-of-fit analysis, each of which can help you understand data and data sets more effectively. You can use variance to determine how far each variable is from the mean and how far each variable is from one another. Variance is a calculation that considers random variables in terms of their relationship to the mean of its data set.
