Best standard deviation- Our brains aren’t good at dictating small relationships or variations, such cases statistics is the only one way to measure the facts.
Statistics is the medium of summarizing data points into meaningful outcomes.
What is Standard deviation?
The positive square root of the variance is called standard deviation. It fulfils all the requisites of a good measure of dispersion.
What is the best Standard deviation?
Always lower the deviation is best. If we are answering to this question the appropriate answer is “It depends on what you are measuring”.
Acceptable Standard Deviation (SD)
A smaller SD indicates the data points are very closer to the mean and the larger SD indicates higher variance in the results.
How to identify data points are the best representation, If the data points the majority of the cases
68% of all data points will be within ±1SD from the mean,
95% of all data points will be within + 2SD from the mean,
99% of all data points will be within ±3SD.
Thus, most cases/checks the action should data routinely fall outside of the ±2SD range.
If still your are looking for any cut off value go for coefficient of variation.
The coefficient of variation (CV) is a statistical measure of the dispersion of data points in a set of observations around the mean.
Coefficient of Variation Formula
Below is the formula for how to calculate the coefficient of variation:
CV=Standard Deviation / Mean
As a thumb rule CV >= 1 indicates a relatively high variation and CV < 1 can be considered as low.
Higher CV indicates higher variation and lower CV indicates lower variation.