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This lesson is a part of the course Statistical Concepts and Market Returns
We earlier learned about calculating the variance and standard deviation for a set of data. Standard deviation as a measure of dispersion is much easier to interpret as it uses the same unit of measurement as the data itself. However, standard deviation is not a good measure if we are comparing the relative degree of variation of two sets of data or distributions. For this purpose we have another measure called the coefficient of variation. The coefficient of variation measures the degree of variation in a distribution relative to the mean of the distribution.
