Dispersion is related to statistics which helps to describe size of range of values that is expected for any particular variable. Dispersion appears to be a helpful tool which enables to find out relation between set of data. There are two different measures of dispersion:

  1. Standard deviation
  2. Variance

While studying finance, you will also come across with dispersion which is adopted in order to study effects of investors as well as analyst beliefs related to security trading. It is interpreted as allows in measuring degree of uncertainty and risk associated with investment portfolio.

Measures of dispersion

  • Standard deviation:

It is a commonly used measure and allows finding out how spread out numbers are derived from the mean.

  • Range:

It is a difference between largest and smallest number found in set of data.

  • Mean difference:

It helps to measure absolute difference between mean values among two different groups.

  • Quartiles:

It is the number that help to split data into four different quarters (first, second, third and fourth quartiles)

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