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Math6 min read

What's the standard difference? Why does the average mean lie?

The average of the two data sets is the same, the degree of dispersion may vary from day to day, and the standard deviation tells you of real fluctuations.

The average is the most common statistical indicator, but it is often “false”. For example, the average math score for both classes is 75, class A is between 70 and 80, and half of class B is 40, half is 110 -- the average score is the same, but different. The standard difference is the indicator used to measure this "dissociation": the larger it is, the more dispersed and volatile the data are; The smaller, the more focused and stable you are. Looking at averages while ignoring poor standards, risks and consistency can easily be miscalculated.

What's the difference?

  • In investment, high standard differential = high volatility = high risk, not confused by average annualized returns
  • (b) The low standard of achievement of the examination shows a more balanced teaching; It's about polarisation.
  • In quality control, standard deviations represent more stable products and less inferior
  • Seeing it with Medium number of average makes it possible to know the center and the separation.
The averages are the same and the standard differentials are most common in investment: the annualization of both funds is 8 per cent, one is stable at 7 to 9 per cent per year, the other is only up and down between -20 and +35 per cent — for the average person, the latter sleeps poorly and is likely to cut down, and stability is part of the return.

Standard deviations and Average are a pair of partners: the former tells you where, and the latter tells you how wide apart. When it is understood, you look at the Fund ' s publicity, medical reports, opinion polls, and not just an average. One step further, the standard deviation is a cornerstone of a lot of "in confidence" and risk assessment, which reminds us that the "floating" behind a number is often more of a concern than the number itself.