Coefficient of Variation

Coefficient of variation - The coefficient of variation is is defined by the ratio of the standard deviation to the mean. The coefficient of variation is important because it adds context to a standard deviation by comparing it to the mean. For example, look at the following observations:

   A) Standard Deviation = 10, Mean = 100
   B) Standard Deviation = 10, Mean = 1,000

Observation A has a much greater spread around the mean than observation B.

Source: NextMark, 23 July 2009 13:04:25, https://www.nextmark.com/resources/glossary-of-terms/ ?glossaryTermId=a0800000000FVTYAA4

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Coefficient of variation - Coefficient of variation is defined as the relative measure of dispersion it relates the mean and standard deviation by expressing the Std deviation as a % of mean. The benefit of standard deviation is a absolute measure which explains the dispersion in the same unit as original data.

[Category=Data Quality ]

Source: iSixSigma, 07 January 2011 08:57:46, https:web.archive.org/web/20111109014246/http:www.isixsigma.com/index.php?option=com_glossary