variance

noun var·i·ance \ ˈver-ē-ən(t)s \
Updated on: 7 Dec 2017

Definition of variance

1 : the fact, quality, or state of being variable or variant : difference, variation
  • yearly variance in crops
2 : the fact or state of being in disagreement : dissension, dispute
3 : a disagreement between two parts of the same legal proceeding that must be consonant
4 : a license to do some act contrary to the usual rule
  • a zoning variance
5 : the square of the standard deviation
at variance
: not in harmony or agreement

Examples of variance in a Sentence

  1. There was some variance in the results.

  2. We noticed a slight variance between the quality of the samples.

  3. He had to get a variance to add a garage on to his house.

Recent Examples of variance from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'variance.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Origin and Etymology of variance

Middle English variaunce "change, variety, discrepancy," borrowed from Anglo-French variance, borrowed from Latin variantia, "diversity, variety," from variant-, varians 1variant + -ia 1-ia

Synonym Discussion of variance

discord, strife, conflict, contention, dissension, variance mean a state or condition marked by a lack of agreement or harmony. discord implies an intrinsic or essential lack of harmony producing quarreling, factiousness, or antagonism.
    • a political party long racked by discord
strife emphasizes a struggle for superiority rather than the incongruity or incompatibility of the persons or things involved.
    • during his brief reign the empire was never free of civil strife
conflict usually stresses the action of forces in opposition but in static applications implies an irreconcilability as of duties or desires.
    • the conflict of freedom and responsibility
contention applies to strife or competition that shows itself in quarreling, disputing, or controversy.
    • several points of contention about the new zoning law
dissension implies strife or discord and stresses a division into factions.
    • religious dissension threatened to split the colony
variance implies a clash between persons or things owing to a difference in nature, opinion, or interest.
    • cultural variances that work against a national identity

Financial Definition of VARIANCE

variance

What It Is

Variance is a statistical measure of how much a set of observations differ from each other.

In accounting and financial analysis, variance also refers to how much an actual expense deviates from the budgeted or forecast amount.

How It Works

For example, let's say Company XYZ stock has the following prices:

The average of these prices is $21.33. To calculate the variance, we see how "far away" each day's stock price is from $21, like this:

Notice that some of the differences are negative. Because we're going to calculate the average difference, the negative numbers create a mathematical problem (they'll offset the positive numbers and screw up the calculation). To avoid this, we square each difference so that each difference is positive, like this:



The last step is simply calculating the average of those squared differences, which is $9.42, and then taking the square root of that number to get the amount by which Company XYZ stock tends to vary from its average price.

The square root is $3.07, meaning that when Company XYZ deviates from that $21 average, it tends to do so by about $3.07.

Why It Matters

Variance is a measure of volatility because it measures how much a stock tends to deviate from its mean. The higher the variance, the more wildly the stock fluctuates. Accordingly, the higher the variance, the riskier the stock.


VARIANCE Defined for English Language Learners

variance

noun

Definition of variance for English Language Learners

  • : an amount of difference or change

  • law : an official decision or document that allows someone to do something that is not usually allowed by the rules


Law Dictionary

variance

noun var·i·ance \ ˈver-ē-əns \

legal Definition of variance

1 : a disagreement between two documents or positions; especially : a disagreement between allegations (as in an indictment or complaint) and proof offered at trial that warrants an appropriate remedy (as a directed verdict or an acquittal) when prejudicial to the substantial rights of the defendant
2 : an authorization to do something contrary to the usual restriction
  • a variance granted by a state agency
; especially : permission for a use of real property that is prohibited by a zoning ordinance — see also unnecessary hardship — compare spot zoning


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