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Co-Efficient of Variation

The document discusses the coefficient of variation (CV), which is a measure used to compare the variability or consistency of different data sets by taking into account both the standard deviation and the mean. CV is defined as the ratio of the standard deviation to the mean expressed as a percentage, and provides a relative measure of dispersion that allows comparison across data sets even if the means are different. Examples are provided to illustrate how CV can be used to determine which player or batsman is more consistent in their performance by accounting for both their average score and the variability in their scores.

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Harsha Y M
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425 views9 pages

Co-Efficient of Variation

The document discusses the coefficient of variation (CV), which is a measure used to compare the variability or consistency of different data sets by taking into account both the standard deviation and the mean. CV is defined as the ratio of the standard deviation to the mean expressed as a percentage, and provides a relative measure of dispersion that allows comparison across data sets even if the means are different. Examples are provided to illustrate how CV can be used to determine which player or batsman is more consistent in their performance by accounting for both their average score and the variability in their scores.

Uploaded by

Harsha Y M
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Co-efficient of Variation

• It is defined as the ratio of the standard deviation (σ) to the mean ()


and is expressed in percentage.

CV = x 100 = x 100
• It is often expressed in Percentage.
• It is insignificant when the MEAN VALUE is close to ZERO.
WHY CV??

Why CV is required when there is Standard Deviation?

 S.D gives us Absolute deviation, whereas CV gives us relative


deviation.
 Thus, CV can be used to compare two given set of data.
CV as a measure of Dispersion

 Along with quartile deviation & standard deviation, Co-efficient of Variation


is also a measure of dispersion.
 It is used to compare variability or consistency of different series of data by
using standard deviation & mean value.

 CV α Variation α

 Higher the CV, Lower the consistency, higher the variation.


WHY CV??

Why CV is required when there is Standard Deviation?

 S.D gives us Absolute deviation, whereas CV gives us relative


deviation.
 Thus, CV can be used to compare two given set of data.
Example- Simple Analogy
Standard Deviation Co-efficient of variation
Scores & Average of Virat Kohli & K L Rahul Scores & Average of Virat Kohli & K L Rahul

Player Average S.D Range of Player Average S.D Range of CV


Runs Runs (S.D / Mean)
Virat Kohli 60 10 50-70 x 100
Virat Kohli 60 10 50-70 16.66%
KL Rahul 40 10 30-50
KL Rahul 40 10 30-50 25%

Here by using Standard Deviation, we cannot decide


who is better player Here by using CV we can say who is more consistent
& who is more variant in scoring runs.
Both have same S.D
V.K is more consistent because he has less CV
We cannot select one player based on S.D
Rahul is more Variant because he has more CV
Problem: Following are the run scored by the two batsmen named Raju &
Manju in 10 innings. Find who is better scorer & who is more consistent.
Raju d2 Manju d2
S.D = S.D =
( = 37.5) ( = 43.1)
101 63.5 4032.25 S.D = 97 53.9 2905.21 S.D =
22 -15.5 240.25 S.D = 33.386 12 -31.1 967.21 S.D = 35.647
0 -37.5 1406.25 40 -3.1 9.61
36 -1.7 2.89 CV = x 100 96 52.9 2798.41 CV = x 100
82 44.5 1980.25 CV = x 100 13 -30.1 906.01 CV = x 100
45 7.5 56.25 CV = 89.03 8 -35.1 1232.01 CV = 82.71
7 -30.5 9030.25 85 41.9 1755.61
3 -34.5 1190.25 8 -35.1 1232.01
65 27.5 756.25 56 12.9 166.41
14 -23.5 552.25 16 -27.1 734.41
∑x =375 ∑d2=11146.50 ∑x =431 ∑d2=12706.90
N=10 N=10
Conclusion

Mean CV
RAJU 37.5 89.03
MANJU 43.1 82.71

 Manju is better run scorer since Mean value is more.


 Manju is more consistent player than Raju since CV is less.
Where Do we use CV??
Application
Corona cases identified in Karnataka & Maharashtra from
March 13th – 19th (7days)
Karnataka Maharashtra
60

50

40

30

20

10

0
Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Mar-19
Where Do we use CV??
Application
To analyse Stocks Volatility in Stock Markets

VOLATILE STOCKS – High Risk Consistent Stocks – Low Risk

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