Question #2c61e

1 Answer
Trevor Ryan.
Sep 5, 2015

It gives you an idea of how far off the data points are from the average or the mean.

Explanation:

For example, suppose we have the following set of data points.
1,2,3,4,5,67,8,9,10.
Then the average or mean value is 5,5 and the sample standard deviation (s) is 3,03 and the population standard deviation (sigma) is 2,87.
This basically means that outliers lie further than 3 units from the average if applying the first standard deviation test.
So a large standard deviation value indicates well varied data. A small standard deviation value indicates a clustered set of data.

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