Analysis Of Frequency Distribution
Chapter Name : Statistics |
Sub Topic Code : 104_11_15_06_02 |
Topic Name : Analysis Of Frequency Distribution |
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Sub Topic Name : Comparison Of Two Frequency Distributions With Same Mean |
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Introduction
• Coefficient of variation is the percentage variation in mean. In other words, Coefficient of variation is defined as ratio of standard deviation to mean. • Data sets with different measurement units can be compared with coefficient of variation.
Pre-Requisites:
Knowledge of measures of dispersion and coefficient of variation.
Activity:
You will observe that volume of balloon is more variable than weight of balloon.
Real Life Question:
Vanguard and T.Rowe are two mutual funds with coefficient of variation 1.38 and 3.20. Which mutual fund is at higher risk for investment?
Key Words / FlashCards
| Key Words | Definitions (pref. in our own words) |
|---|---|
| Coefficient of variation | The measure of variability which is independent of units is called As coefficient of variation. |
| Measure of variability | It is a measure of how data is scattered or dispersed. |
Learning aids / Gadgets
| Gadgets | How it can be used |
|---|---|
| Balloon | Blow air in balloon. Suppose mean weight of balloon is 1 pound and its standard deviation is 0.9 pounds and its volume is 3.8 cubic feet and its standard deviation is 0.8 cubic feet. We can compare variations of weight and volume using coefficient of variation as weight and volume are two different units of measurements. |
Real life uses :
Coefficient of variation is used in financial business statistics, in scientific research.
Places to visit :
Calculate mean and standard deviation of heights and weights of your family members. Can we say weights show greater variation than heights?
Practical examples around us
| Examples | Explainations |
|---|---|
| Stock market | Coefficient of variation is used in financial investment to determine risk factor associated with the stock. The greater variability in price of stock, the more the risk. |
What you learn in Theory:
Coefficient of variation is ratio of standard deviation to mean. It is determined in percentage. Two data sets with different measurement units are compared with coefficient of variation.
What you learn in Practice:
In comparing wages bills of two sections of a shopping mall the greater coefficient of variation of a particular section indicates that section is less stable than the other.