when we want to compare two or more data sets the coefficient of variation is used the cv is the ratio of the standard deviation to the mean and because it s independent of the unit in which the measurement was taken it can be used to compare data sets with different units or widely different means 
in short the standard deviation measures how far the average value lies from the mean whereas the coefficient of variation measures the ratio of the standard deviation to the mean 2advantages and disadvantages of the coefficient of variation cv the coefficient of variation can be useful when comparing data sets with different units or widely different means 3that includes when the risk reward ratio is used to select investments for example an investor who is risk averse may want to consider assets with a historically low degree of volatility relative to the return in relation to the overall market or its industry conversely risk seeking investors may look to invest in assets with a historically high degree of volatility 