# Variance

**Category:** metrics  
**Short Description:** The average of the squared differences from the mean.  
**Last Updated:** 2024-03-15

## Definition

The variance is the average of the squared differences from the mean.

## Calculation

**Formula:** `σ² = Σ(x - μ)² / N`

**Explanation:** Sum of squared differences from mean (μ) divided by sample size (N). Higher values indicate greater data spread and volatility.

### Components

- **Values**: The individual values in the dataset
- **Mean**: The mean of the dataset
- **Sample Size**: The number of observations in the dataset

## Examples

- High CPC variance indicating unstable auction conditions
- Low conversion rate variance suggesting consistent performance
- Budget allocation based on ROAS variance across campaigns

## Related Terms

### Component Terms

- **[Standard Deviation](/resources/glossary/metrics/standard-deviation)**: Square root of variance, providing more interpretable measure of spread
- **[Statistical Significance](/resources/glossary/metrics/statistical-significance)**: Variance helps determine required sample sizes for significant results
- **[Sample Size](/resources/glossary/metrics/sample-size)**: Sample size affects the precision of variance estimates