BNET Business Dictionary
Business Definition for: Variance
- the square of a standard deviation
- a measure of the difference between actual performance and forecast, or standard, performance. Variance is a key measure in statistical process control.
- the difference between a planned, budgeted, or standard cost and the actual cost incurred. The same comparisons may be made for revenues.
Wiktionary Definition for: Variance
- #The act of varying or the state of being variable
- #A difference between what is expected and what happens
- #The state of differing or being in conflict
- #A discrepancy, especially between two legal documents
- #(''statistics'') the square of the standard deviation
- English variance
Additional Resources
- Market Price of Variance Risk and Performance of Hedge Funds
- This paper implements a model-free approach to measure the market price of the variance risk. In this approach, the value of the variance contract is estimated from prices of traded options. The paper finds that when the variance risk is priced, its risk premium is negative and economically very large....
- White papers 2004-03-01
- Some New Variance Bounds for Asset Prices
- When equity prices are determined as the discounted sum of current and expected future dividends, Shiller (1981) and LeRoy and Porter (1981) derived a relationship between the variance of the price of equities, pt, and the variance of the ex post realized discounted sum of current and future dividends: p*t:...
- White papers 2004-12-01
- An Economic Motivation for Variance Contracts
- Variance contracts permit the trading of 'Variance risk', i.e. the risk that the squared volatility of stock returns changes randomly over time. The authors discuss why investors might want to trade this type of risk, and why they might prefer a variance contract to standard calls and puts for this...
- White papers 2004-11-14
- Variance Report
- A variance report calculates the variance in days between your original planned baseline completion date and your actual or estimated completion date. This template helps you create a variance report quickly and easily.
- Tools & templates 2004-05-01
- Modified large-sample confidence intervals for linear combinations of variance components: extension, theory, and application.
- We consider the problem of setting a confidence interval or bound for a linear combination of variance components related to a multivariate normal distribution, which includes important applications such as comparing variance components and testing the bioequivalence between two drug products. The lack of an exact confidence interval for a...
- Research articles 2004-06-01
- Mean-Variance Optimization: Modern Portfolio Theory
- This article introduces the concepts of Mean-Variance Optimization MVO and Modern Portfolio Theory MPT in both single and multi-period contexts. It is also intended to help one decide which of the two MVO products, VisualMvo or MvoPlus, should one consider for investments. The fundamental goal of portfolio theory is to...
- White papers 2003-01-01
- Modelling Directional Hedge Funds Mean, Variance and Correlation With Tracker Funds
- Many hedge fund managers use some kind of systematic approach to actively trade the markets. Modelling the returns generated by these dynamic strategies requires allowing for market inefficiencies. In this paper the first two moments, expected value and variance are derived analytically for a general class of trading rules with...
- White papers 2002-08-01
- Optimal Reinsurance Under Mean-Variance Premium Principles
- This white paper presents the derivation of optimal reinsurance under premium principles based on the mean and variance of the reinsurer's share of the total claim amount. Both global reinsurance and local reinsurance are studied. The paper further explores certain examples considered in this context which includes standard deviation principle...
- White papers 2000-10-04
- Plan Vs. Actual Variance Report (Financial Services)
- This template is designed to help finance professionals analyze key line items from the income statement profit and loss statement and the balance sheet against annual financial plans to determine overall progress toward your organization's financial goals. The user can enter planned and actual data on this template and see...
- Tools & templates 2004-05-03
- Hyundai Wins Noise Variance for Eugene, Ore., Computer Chip Factory.(Originated from The Register-Guard, Eugene, Ore.)
- Apr. 5--Eugene, Ore., officials granted Hyundai a new noise variance Thursday, but opponents vowed to appeal the decision that allows more nighttime work at the computer chip factory the Korean firm is building in west Eugene. Apr. 5--Eugene, Ore., officials granted Hyundai a new noise variance...
- Research articles 1996-04-05
- Exploration License Work Program Variance Agreement Announced by Mason Oil Company Inc
- SARASOTA, Fla.--BUSINESS WIRE--June 29, 1999-- Mason Oil Company, Inc. (OTC BB:MSNO) announces the approval of the variance in work program application for Petroleum Exploration License for both PEL 61 and PEL 63 in the OFFICER BASIN in North Central South Australia. The Variance Agreement adjusts and extends the work...
- Research articles 1999-06-29
- Portfolio Variance and Correlation Matrices
- The fact that portfolio variance must be positive implies that the correlation matrix for asset returns should be positive definite. As such, a test for positive definiteness in the correlation matrix should be routinely implemented prior to any portfolio optimization exercise. A program is developed to test for positive definiteness...
- White papers 2003-01-01
- Minimum-Variance Kernels, Economic Risk Premia, And Tests Of Multi-beta Models
- This paper uses minimum-variance MV admissible kernels to estimate risk premia associated with economic risk variables and to test multi-beta models. Estimating risk premia using MV kernels is appealing because it avoids the need to 1) identify all relevant sources of risk and 2) assume a linear factor model for...
- White papers 2001-11-01
- On Tail Conditional Variance and Tail Covariances
- This paper examines the tail conditional variance of a risk X defined to be the variability of the risk along its right tail and tail covariance of two risks X1 and X2 defined to explain the linear dependency of the risks along their right tails, and study their potential use...
- White papers 2004-03-28
- Comparing Downside-Risk and Mean-Variance Analysis Using Bootstrap Simulation
- Is Downside risk DR a better alternative to the traditional mean-variance analysis MV for real estate portfolio diversification? This study demonstrates a bootstrap approach for comparing the two models. The results show that ex ante DR portfolio return distributions tend to be negatively skewed with a smaller left tail, and...
- White papers 2002-03-11
- Variance of the CTE Estimator
- The Conditional Tail Expectation CTE, also called Expected Shortfall or Tail-VaR, is a robust, convenient and coherent measure for quantifying financial risk exposure. This paper looks at some statistical properties of the methods that are commonly used to estimate the CTE and develop a simple formula for the variance of...
- White papers 2003-10-01
- Measuring Performance in Services: Services Are More Difficult to Measure and Monitor Than Manufacturing Processes, But Executives Can Rein in Variance and Boost Productivity if They Implement Rigorous Metrics
- Faced with stiffening competition, increasingly demanding customers, high labor costs, and, in some markets, slowing growth, service businesses around the world are trying to boost their productivity. But whereas manufacturing businesses can raise it by monitoring and reducing waste and variance in their relatively homogeneous production and distribution processes, service...
- White papers 2006-02-15
- ABC Reports Variance Data
- The Audit Bureau of Circulations has released its first summary of aggregated variance data for consumer magazines, showing an average adjustment of - 0.33% for the 2003 calendar year.
- Research articles 2004-06-01
- Approval of parking variance upheld
- Many of us have experienced the problem of finding a place to park. Parking and whether enough parking spots exist at a shopping plaza in Greece to justify the approval of a parking variance was the main issue addressed by New York State Supreme Court, Monroe County Judge Andrew V....
- Research articles 2004-10-14
- Variance estimation for survey data with composite imputation and nonnegligible sampling fractions.
- An estimation method based on variance decomposition is considered for Horvitz-Thompson-type estimated totals based on survey data with composite imputation and nonnegligible sampling fractions. The proposed approach is applicable to complicated cases where a composite of certain deterministic and/or random imputation techniques is utilized, including the use of imputed values...
- Research articles 1999-03-01
