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Standard deviation to Variance for a percentage (return on investment say)?
So if the standard deviation of, say, a portfolio is 15%, what is its variance? I am getting confused because 15%=0.15 and normally you just square standard deviation to get variance. Now 0.15^2 is 0.0225 which translates back to 2.25%... but 15^2 is 225. So is variance 225% or 2.25% in this case.
1 Answer
- ?Lv 68 years agoFavorite Answer
"normally you just square standard deviation to get variance"
You ** ALWAYS ** square standard deviation to get variance.
"So is variance 225% or 2.25% in this case."
(15%)^2 = 0.15^2 = 0.0225=2.25%
or
(15%)^2 = (15)^2*(%)^2 = 225%% = 2.25%
If you have units on some number that you are squaring (and % works like units) you have to square that too.
