Variance and

Standard
Deviation
 Variance and Standard Deviation

Standard deviation – It is one of the most

widely used measures of dispersion. The
more spread apart the data, the higher the
deviation. It is calculated as the square root
of variance. It is also known as historical
volatility and is used by investors as a
gauge for the amount of expected volatility.
 Variance and Standard Deviation

Variance – It is a measure of dispersion of

a set of data points around their mean
value. It is a mathematical expectation of
the average squared deviations from the
mean.
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Formula:
 

=
s=
Alternative Formula:
= s=
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Where:
 

= sample variance
s = sample standard deviation
x = the value of any particular observations
or measurement.
= sum of all xs
= sum of all square of xs
x = sample mean
n = sample population
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Example:
The daily rates of a sample of eight
employees at GMS Inc. are P550, P420,
P560, P500, P700, P670, P860, P480. Find
the variance and standard deviation.
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Solution:
 

Step #1: Compute the mean of the data set.

x=
x=
x=
x = 592.50
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Solution:
Step #2: Subtract the mean from each of the
value in the data set.
x x–x
550 -42.5
420 -172.5
560 -32.5
500 -92.5
700 107.5
670 77.5
860 267.5
480 -112.5
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Solution:
Step #3: Square the x – x, then get the sum.
Sample Variance and Sample Standard
Deviation for Ungrouped Data.

x x –x (x - x
550 -42.5 1,806.25
420 -172.5 29,756.25
560 -32.5 1,056.25
500 -92.5 8,556.25
700 107.5 11,556.25
670 77.5 6,006.25
860 267.5 71,556.25
480 -112.5 12,656.25
= 142,950
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Solution:
 

Step #4: Solve for variance and standard

deviation.
= = = 20,421.43
s= = =
s = 142.90
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Alternative Solution:
Step #1: Get the sum of the data set.
X
550
420
560
500
700
670
860
480
= 4,740
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Alternative Solution:
Step #2: Square the values in the data set
and get the sum
Sample Variance and Sample Standard
Deviation for Ungrouped Data.

x
550 302,500
420 176,400
560 313,600
500 250,000
700 490,000
670 448,900
860 739,600
480 230,400
= 2,951,400
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

Alternative Solution:
Step #3: Apply the alternative formula to
solve for the variance and standard
deviation.
 Sample Variance and Sample Standard
Deviation for Ungrouped Data.

=
 

=
=
= 20,421.43
=
s = 142.90
 Class exercise 1
The supervisor of a fast-food restaurant
selected several receipts at random. The
amounts spend by customers were P75,
P60, P65, P62, P80, P83, P89, and P78.
Make a table and find the variance and
standard deviation.
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Formula:
 

=
s=
Alternative Formula:
= s=
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Example:
Determine the variance and standard
deviation using the data below.
Class limits Frequency
18-26 3
27-35 5
36-44 9
45-53 14
54-62 11
63-71 6
72-80 2
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Solution:
Step #1: Determine the midpoints on each
class limits.
Class limits Frequency (f) Midpoints (x)
18-26 3 22
27-35 5 31
36-44 9 40
45-53 14 49
54-62 11 58
63-71 6 67
72-80 2 76
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Solution:
Step #2: Determine the product of fx.
Class limits Frequency (f) Midpoints (x) fx

18-26 3 22 66
27-35 5 31 155
36-44 9 40 360
45-53 14 49 686
54-62 11 58 638
63-71 6 67 402
72-80 2 76 152
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Solution:
Step #3: Get the sum of product fx.
Class limits Frequency (f) Midpoints (x) fx
18-26 3 22 66
27-35 5 31 155
36-44 9 40 360
45-53 14 49 686
54-62 11 58 638
63-71 6 67 402
72-80 2 76 152
Total 50 = 2,459
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Solution:
 

Step #4: Get the value of the mean.

x = = = 49.18
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Solution:
Step #5: Subtract the mean from each of the
value in the data set.
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Class limits f x fx x–x

18-26 3 22 66 -27.18

27-35 5 31 155 -18.18

36-44 9 40 360 -8.18

45-53 14 49 686 -0.18

54-62 11 58 638 8.82

63-71 6 67 403 17.82

72-80 2 76 152 26.82

 Sample Variance and Sample Standard
Deviation for Grouped Data.

Solution:
Step #6: Square the x - x
x–x (x – x
-27.18 738.7534
-18.18 330.5142
-8.18 84.2724
-0.18 0.0324
8.82 77.7924
17.82 317.5524
26.82 719.3124
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Solution:
 

Step #7: Get the product of f and (x – x,

then obtain the sum.
Sample Variance and Sample Standard
Deviation for Grouped Data.

f (x - x f(x - x

3 738.7534 2,216.2572

5 330.5142 1,652.5620

9 84.2724 758.4516

14 0.0324 0.4536

11 77.7924 855.7164

6 317.5524 1,905.3144

2 719.3124 1,438.6248

50 = 8,827.38
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Solution:
 

Step #8: Get the value of variance and

standard deviation
= = = 180.15
=
s = 13.42
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Alternative Solution:
Step #1: Determine the midpoints on each
class limit.
Class limits Frequency (f) Midpoints (x)
18-26 3 22
27-35 5 31
36-44 9 40
45-53 14 49
54-62 11 58
63-71 6 67
72-80 2 76
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Alternative Solution:
Step #2: Determine the product of fx.
Class limits Frequency (f) Midpoints (x) fx

18-26 3 22 66
27-35 5 31 155
36-44 9 40 360
45-53 14 49 686
54-62 11 58 638
63-71 6 67 402
72-80 2 76 152
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Alternative Solution:
Step #3: Get the sum of product fx.
Class limits Frequency (f) Midpoints (x) fx
18-26 3 22 66
27-35 5 31 155
36-44 9 40 360
45-53 14 49 686
54-62 11 58 638
63-71 6 67 402
72-80 2 76 152
Total 50 = 2,459
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Alternative Solution:
 

Step #4: Multiply fx with x to otain the

product of f.
Sample Variance and Sample Standard
Deviation for Grouped Data.

x fx f

22 66 1,452

31 155 4,805

40 360 14,400

49 686 33,614

58 638 37,004

67 402 26,934

76 152 11,552

= 2,459 = 129,761
 Sample Variance and Sample Standard
Deviation for Grouped Data.

Alternative Solution:
 

Step #5: Get the value of variance and

standard deviation.
= =
= = 180.15
=
s = 13.42
 Class exercise 2
The table shows the frequency
distribution of the number of orders
received each day during the past 25 days
at the office of a mail order company.
Complete the table and compute the
variance and standard deviation.
 Class exercise 2
Number of f x fx x–x (x – x f(x – x
orders

7-9 3

10-12 1

13-15 5

16-18 3

19-21 10

22-24 3

Total 25
 Population Variance and Population
Standard Deviation
Formula:
 

=
σ=
 Population Variance and Population
Standard Deviation
Where:
 

= population variance
𝜎 = population standard deviation
x = the value of any particular observations
or measurement.
µ = population mean
N = population
 Population Variance and Population
Standard Deviation
Example:
The monthly incomes of the five
research directors of Recoletos schools are:
P55,000, P59,500, P62,500, P57,000, and
P61,000. Find the variance and standard
deviation.
 Population Variance and Population
Standard Deviation
Solution:
 

Step #1: Compute the mean of the data set.

µ=
µ=
µ=
µ = 59,000
 Population Variance and Population
Standard Deviation
Solution:
Step #2: Subtract the population mean from
each of the value in the data set.

x x-µ
55,000 -4,000
59,500 500
62,500 3,500
57,000 -2,000
61,000 2,000
 Population Variance and Population
Standard Deviation
Solution:
Step #3: Get the square of x-µ, then get the
sum.
x x-µ (x-µ

55,000 -4,000 16,000,000

59,500 500 250,000

62,500 3,500 12,250,000

57,000 -2,000 4,000,000

61,000 2,000 4,000,000

= 295,000 =0 = 36,500,000
 Population Variance and Population
Standard Deviation
Solution:
 

Step #4: Solve for the population variance

and population standard deviation
= = = 730,000
=
𝜎 = 2,701.85