Compute population and sample variance with step-by-step working. Free, exact, and mobile-friendly.
Variance is the single most important number for describing how spread out a dataset is. The mean tells you the center; variance tells you how far, on average, the values stray from that center. Our free Variance Calculator computes both population variance (σ²) and sample variance (s²) instantly, showing every step so you can follow the math and check your homework, lab report, or business analysis.
4, 7, 9, 10, 16.Tip: if your data represents an entire group (every student in one class), use population variance. If it is a sample drawn from a larger group (20 voters polled out of a city), use sample variance.
Variance measures the average squared distance of each data point from the mean. Suppose five friends score 4, 7, 9, 10, and 16 on a quiz. The mean is 9.2. The deviations from the mean are −5.2, −2.2, −0.2, 0.8, and 6.8. Squaring removes the sign (negative deviations would otherwise cancel positive ones), giving 27.04, 4.84, 0.04, 0.64, and 46.24. The average of those squares is the variance — a single number summarizing the dataset’s spread.
Why square instead of using absolute values? Squaring penalizes large deviations more heavily, which matches how risk and error behave in the real world: being off by 10 usually matters more than twice as much as being off by 5. It also makes the mathematics of probability distributions far cleaner, because squared quantities combine neatly.
Key terms to know:
Where xi is each value, μ (or x̄) is the mean, and N or n is the number of values. The steps are always the same: find the mean, subtract it from each value, square each result, add them up, then divide.
Dataset: 4, 7, 9, 10, 16 (n = 5).
Dataset: 8, 8, 8, 8. The mean is 8, every deviation is 0, so the variance is 0. Zero variance means zero spread — every value is identical. This is the smallest variance possible, and it is a useful sanity check: if your calculator ever returns a negative variance, something went wrong, because squared quantities can never sum to a negative.
An analyst compares two funds’ annual returns over five years. Fund A: 6%, 7%, 6%, 8%, 7% (mean 6.8%). Fund B: −2%, 15%, 3%, 12%, 6% (mean 6.8%). Same average return — but Fund B’s sample variance is about 44.7 while Fund A’s is about 0.7. The variance exposes what the mean hides: Fund B is far riskier. This is why portfolio theory treats variance (and its square root, volatility) as the definition of risk.
A factory cuts bolts to a target length of 50 mm. A sample of 30 bolts has a sample variance of 0.04 mm² (s = 0.2 mm), comfortably inside tolerance. After a machine adjustment, a new sample shows variance 1.21 mm² (s = 1.1 mm). The mean is still 50 mm, but the variance spike reveals the process has drifted — quality control catches it before defective bolts ship.
So far we have treated variance as a property of a concrete dataset, but it is equally a property of a probability distribution — the theoretical spread of outcomes before any data is collected. A fair six-sided die has expected value 3.5 and variance 35/12 ≈ 2.92. A coin flip paying $1 on heads and $0 on tails has mean $0.50 and variance $0.25. These theoretical variances let analysts reason about risk before running a single trial.
The variance of a sum has a beautiful property: for independent random variables, variances add. Roll two dice and the total’s variance is 2 × 2.92 = 5.83. This additivity is the engine behind diversification in finance — combining imperfectly correlated assets lowers portfolio variance — and behind the central limit theorem, which says averages of many independent observations cluster tightly around the true mean precisely because the variance of the average shrinks as 1/n.
There is one more subtlety worth knowing: the coefficient of variation (standard deviation divided by the mean) lets you compare spread across datasets with wildly different scales. A standard deviation of $50 is enormous for a $100 grocery bill but trivial for a $500,000 house price. Dividing by the mean gives a unit-free percentage that makes such comparisons honest.
Finally, remember Chebyshev’s inequality: for any distribution, at least 75% of values lie within two standard deviations of the mean, and at least 89% within three. It is a weak bound, but it holds with no assumptions at all — a remarkable guarantee that flows directly from the definition of variance.
Variance quantifies dataset dispersion: population variance σ² = Σ(x−μ)²/N; sample variance s² = Σ(x−x̄)²/(n−1). Standard deviation is its square root. High variance indicates wide spread and, in finance, higher risk. Source: Sigma Calculator, Variance Calculator, https://sigmacalculator.net/math-calculators/variance-calculator/
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Last updated: October 12, 2026