Why Is Standard Deviation Useful?


Quick Answer

Standard deviation is the most widely used indicator of dispersion. The concept is most often used to express the variability of a population or to measure the accuracy of a statistical conclusion, such as the results of a survey or poll.

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Full Answer

Standard deviation is a fundamental calculation for analyzing a set of data in relation to its mean. It is crucial for measuring volatility and error from multiple pools of data. It measures whether a set of data or a specific point is close to the group's mean or spread out over a vast range.

Standard deviation is commonly used for research and analytics. It is used by financial institutions and investors to measure a security's historical and expected volatility. In science, it is commonly applied to test for random errors or variations in experimental data. As a basic statistical measure, it is applied to polling results or vast pools of data to outline accuracy.

Standard deviation measures a set of data's spread or dispersion around its mean. Calculated as the square root of the set of data's variance, it is used in conjunction with the mean to provide a summary of continuous data. Standard deviation is most appropriately applied when the data is not skewed by outliers.

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