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Old 11-04-2005, 07:14 AM
nanoCRUSHER nanoCRUSHER is offline
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Join Date: Apr 2005
Posts: 18
Default Re: Variance and Volitility

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"Variance" is a well-defined term in mathematical statistics. It is the average squared deviation from the mean. "Volatility" is a general English word with different definitions in different contexts. It is used most extensively in Finance, where it means the square root of variance, but it is used in a continuous time context while "standard deviation" would be the term for a fixed time horizon.

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Uh... ok. [img]/images/graemlins/laugh.gif[/img]

Now - in little words? [img]/images/graemlins/wink.gif[/img]

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Variance is a noun (ie. my variance in this game is $10/100 hands), whereas volatility is an adjective (ie. my investment in technology stocks is a volatile strategy).
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