What Is Variance in Statistics? Definition, Formula, and Example

Variance is a measurement of the spread between numbers in a data set. Investors use the variance equation to evaluate a ...
Risk

An efficient Monte Carlo method for discrete variance contracts

We develop an efficient Monte Carlo method for the valuation of financial contracts on discretely realized variance.We work with a general stochastic volatility model that makes realized variance ...
Risk

Pricing options on realized variance in the Heston model with jumps in returns and volatility Part II. An approximate distribution of discrete variance

We analyze the effect of discrete sampling on the valuation of options on the realized variance in the Heston stochastic volatility model. It has been known for some time that, although quadratic ...
Investopedia

Understanding Portfolio Variance: Key Concepts and Calculation Formula

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...
Simon Fraser University

Discrete Probability Distributions

Continuous Variable: can take on any value between two specified values. Obtained by measuring. Covariance: a measure of the direction of the linear relationship between two variables. Discrete ...