what is the coefficient of variation cv 
the coefficient of variation cv is a statistical measure of the dispersion of data points in a data series around the mean the coefficient of variation represents the ratio of the standard deviation to the mean and it is a useful statistic for comparing the degree of variation from one data series to another even if the means are drastically different from one another matthew collins investopediaunderstanding the coefficient of variation cv the coefficient of variation shows the extent of variability of data in a sample in relation to the mean of the population in finance the coefficient of variation allows investors to determine how much volatility or risk is assumed in comparison to the amount of return expected from investments ideally if the coefficient of variation formula should result in a lower ratio of the standard deviation to mean return then the better the risk return tradeoff 1they re most often used to analyze dispersion around the mean but quartile quintile or decile cvs can also be used to understand variation around the median or 10th percentile for example the coefficient of variation formula or calculation can be used to determine the deviation between the historical mean price and the current price performance of a stock commodity or bond relative to other assets coefficient of variation cv formulabelow is the formula for how to calculate the coefficient of variation 2cv where standard deviation mean begin aligned text cv frac sigma mu textbf where sigma text standard deviation mu text mean end aligned cv where standard deviation mean to calculate the cv for a sample the formula is c v s x 100 cv s x 100 cv s x 100where s samplex mean for the populationmultiplying the coefficient by 100 is an optional step to get a percentage rather than a decimal the coefficient of variation formula can be performed in excel by first using the standard deviation function for a data set next calculate the mean by using the excel function provided since the coefficient of variation is the standard deviation divided by the mean divide the cell containing the standard deviation by the cell containing the mean coefficient of variation cv vs standard deviationthe standard deviation is a statistic that measures the dispersion of a data set relative to its mean it is used to determine the spread of values in a single data set rather than to compare different units 