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Dispersion

• Is a statistical indication of variability, volatility, or risk. Some common measures of dispersion are:

  • Coefficient of Variation
  • Range
  • Standard Deviation
  • Variance

There are other measures besides the above some of which refer to shape or skewness.

 
 Embedded terms in definition
 Coefficient of variation
Risk
Skewness
Standard deviation
Volatility
 
 Referenced Terms
 Coefficient of variation: Is a statistic which is used to determine the degree of relative Dispersion. It extends standard deviation analyses. By definition, standard deviations are statistical measures of absolute dispersion. Therefore, it is difficult to compare the variability of two different asset classes or assets within those classses. It is computed by dividing the standard deviation of Asset I by the mean of Asset I. Similarly, the standard deviation of Asset II is divided by the mean of Asset II and so forth. These multiple coefficient of variation can then be compared against one another. By using the coefficient of variation, an analyst can compare variation among relatively high and low priced securities. Similarly, the analyst can evaluate the volatility differences between commodities, currencies, stocks and bond markets.Abbreviated CV. A measure of relative Dispersion used in comparing the risk of assets with differing expected returns. It is the ratio of the standard deviation divided by the mean (or expected return). It tells you the number of units of risk per unit of return.

 Coefficient of variation: Is a statistic which is used to determine the degree of relative Dispersion. It extends standard deviation analyses. By definition, standard deviations are statistical measures of absolute dispersion. Therefore, it is difficult to compare the variability of two different asset classes or assets within those classses. It is computed by dividing the standard deviation of Asset I by the mean of Asset I. Similarly, the standard deviation of Asset II is divided by the mean of Asset II and so forth. These multiple coefficient of variation can then be compared against one another. By using the coefficient of variation, an analyst can compare variation among relatively high and low priced securities. Similarly, the analyst can evaluate the volatility differences between commodities, currencies, stocks and bond markets.Abbreviated CV. A measure of relative Dispersion used in comparing the risk of assets with differing expected returns. It is the ratio of the standard deviation divided by the mean (or expected return). It tells you the number of units of risk per unit of return.

 Risk: The chance of financial loss, or more formally, the variability of returns associated with a given asset. The chance that actual outcomes may differ from those expected.The possibility that an investment will lose or not gain value; also refers to a peril covered by an insurance contract.Degree of uncertainty of return on an asset.Possibility that an investment's actual return will be different than expected; includes the possibility of losing some or all of the original investment. Measured by variability of historical returns, or Dispersion of historical returns around their average return.Is the variability inherent in investment, speculative or trading activities. The greater the variability, the higher the risk. Risk can be attributed to many factors. As such, the specification of a risk can described with the use of an associated qualifying term. These terms include but are not limited to credit, counterparty, liquidity, market, fraud, currency, roll, agency, coupon, event, corporate and country.Typically defined as the standard deviation of the return on total investment. Degree of uncertainty of return on an asset.

 Standard deviation: The most common statistical indicator of an asset's risk; it measures (in the same units as the expected value) the Dispersion of possible values around the expected value.Is a measure of volatility, risk, or statistical Dispersion. The standard deviation is calculated by:

  • computing the mean of the series
  • then taking the deviation by subtracting the mean from each observation,
  • squaring the differences or deviations for each observation,
  • dividing the sum of the squared deviations by the number of observations
  • and then calculating the positive square root of the sum of squared deviations.

In other words, the standard deviation is the positive square root of the variance.The square root of the variance. A measure of Dispersion of a set of data from their mean.

 Standard deviation: The most common statistical indicator of an asset's risk; it measures (in the same units as the expected value) the Dispersion of possible values around the expected value.Is a measure of volatility, risk, or statistical Dispersion. The standard deviation is calculated by:

  • computing the mean of the series
  • then taking the deviation by subtracting the mean from each observation,
  • squaring the differences or deviations for each observation,
  • dividing the sum of the squared deviations by the number of observations
  • and then calculating the positive square root of the sum of squared deviations.

In other words, the standard deviation is the positive square root of the variance.The square root of the variance. A measure of Dispersion of a set of data from their mean.

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