• Dispersion is a measurement of the spread between numbers in a set of data.

  • Specifically, it measures the extent to which the data scatter around the sample mean.
  • Investors use variance to see how risky an investment is and whether it will be profitable.
  • Variance is also used in finance to compare the relative performance of each asset in a portfolio to achieve the best asset allocation.
  • The square root of the variance is the standard deviation.