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Where Is The Application Of Standard Deviation?

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Standard deviation basically provides you with a lower and upper range within which, if a value fluctuates is considered to be normal. It has many applications like:

  • In production systems, the values are constantly monitored and the standard deviation is used as the upper and lower control limit, anything above or below represents a problem. This technique is called SPC, statistical process control

  • In finance, there are various measures used to determine the risks involved in an investment and standard deviation is one of them. The higher the standard deviation, the riskier the investment

  • In sports teams are rated in different categories. The teams with a high standard deviation scores shoe that they perform well in some categories but were quite the opposite in the others.

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