Coefficient of Variation

Coefficient of Variation

A measure of investment risk that defines risk as the standard deviation per unit of expected return.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Coefficient of Variation

In statistics, the ratio of the standard deviation of a series of data points to the expected return. In investing, the coefficient of variation is used to measure the volatility (represented by the standard deviation) to the expected return on an investment. A lower coefficient of variation indicates a higher expected return with less risk. See also: Beta.
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