What is the coefficient of variation?
The coefficient of variation is is defined by the ratio of the standard deviation to the mean. The coefficient of variation is important because it adds context to a standard deviation by comparing it to the mean. For example, look at the following observations:
A) Standard Deviation = 10, Mean = 100
B) Standard Deviation = 10, Mean = 1,000
Observation A has a much greater spread around the mean than observation B.
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