what is standard deviation useful for?

Question

Can someone explain standard deviation in a way i can understand? I know it is the spread and that it measures variablity, but what is it useful for?

Answer 1

It is the measure of how far away from the average is something on average. Take for instance how tall people are. Say this value is 5ft9. Then the standard deviation is a measure of how far from the mean people are on the average. In the case of height, say the standard deviation is 3 inches, then any person you pick at random is most likely to be 3 inches from that mean, on average.
This value allows to describe how spread a population is. 95% of a population would be in the interval 2 standard veriation less than average to 2 standard deviation above the average. This means someone who designs cars, clothes, chairs, anything, would satisfy 95% of the population by making sure it can be used by someone between 5ft3 and 6ft3 (average minus or plus two standard deviations).

Answer 2

The standard deviation could be used as a measure of risk. Or how volitale an investment vehicle is. High standard deviation = more risk Low standard deviation = less risk

Answer 3

The standard deviation is the possible/expected range of change up and down. It is most commonly used as a measure of the volatility of investments. Bonds usually have a low standard deviation tech stocks can have a high standard deviation.

ps- this answer puts me at level 3!

Answer 4

When plotting data to match a line or curve, there is typically standard deviation. This means there exist an acceptable amount that the data's value can deviate from the line or curve.

Next time you plot data, you'll probably see that the points don't lie on the line exactly but deviate from it a little (or a lot).

Answer 5

to see how far away from the average something is. for example the bell curve.