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How to Use Excel to Calculate Coefficient of Variation

The coefficient of variation is a statistical measure of the distribution or dispersion of data around mean. This measure is used to analyze the difference of spread in the data relative to the mean value. Coefficient of variation is derived by dividing the standard deviation by the mean.

Warning

If the mean value of the data is zero it is not possible to calculate the coefficient of variance. Similarly, if the data contains both positive and negative values, coefficient of variance is not a reliable static measure. Coefficient of variance is a reliable static measure only if the data contains positive values.

Tip

Coefficient of variation is used to check the consistency of data or sample values in science experiments. If the coefficient of variation value is high, it depicts the inconsistency of data or sample values.

Step 1

Identify the set of numbers for which

the coefficient of variation is to be calculated. Enter the data on the Excel sheet. This example uses cells A2:A7, but your Excel file may use other cells.

Microsoft Excel data entry. (Image: Gurudev Ravindran)

Step 2

Use the function Stdev (number1, [number2],…) to calculate the standard deviation in Microsoft Excel. Input the formula =Stdev (A2:A7) for this example -- but enter your actual cell usage in your Excel file -- in a blank cell and press Enter to calculate the standard deviation.

Calculate the standard deviation. (Image: Gurudev Ravindran)

Tip

Every formula in Microsoft Excel needs to be preceded by the equal sign.

Step 3

Use the function =Average(number1, [number2],…) to calculate the mean in Microsoft Excel.

Calculate the mean. (Image: Gurudev Ravindran)

Step 4

Calculate the coefficient of variance. (Image: Gurudev Ravindran)

Source: ehow.com
Category: Forex