Measure of spread definition

As a measure of sprea it’s actually pretty weak. A large variance of 200 for example, doesn’t tell you much about the spread of data — other than it’s big! The most important reason the variance exists is to give you a way to find the standard deviation: the standard deviation is the square root of variance.

Measures of Spread Introduction. A measure of spread , sometimes also called a measure of dispersion, is used to describe the variability in a sample or population.

It is usually used in conjunction with a measure of central tendency, such as the mean or median, to provide an overall description of a set of data. They summarise how close each observed data value is to the mean value. In datasets with a small spread all values are very close to the mean, resulting in a small variance and standard deviation. Definition of Yield Spread The yield spread is the difference in the expected rate of return between two investments. These investments could be in stocks, bonds, real estate, etc.

The simplest measure of the spread of a distribution is the range, that is, the difference between the largest and smallest values recorded. However, this only provides very limited information regarding the pattern of spread , and several other measures are used in conjunction with, or in preference to, the range. Treasury bond and a debt security with the same maturity but of lesser quality.

A credit spread can also refer to an. A measure of statistical dispersion is a nonnegative real number that is zero if all the data are the same and increases as the data become more diverse. Most measures of dispersion have the same units as the quantity being measured.

In other words, if the measurements are in metres or seconds, so is the measure of dispersion. The spread in data is the measure of how far the numbers in a data set are away from the mean or median. Definition : The credit spread , also called a yield spread , is the difference between two bonds’ yields that are the same in all respects except their credit rating. We can calculate spread in a variety of ways.

The Z-spread , ZSPR zero-volatility spread or yield curve spread of a mortgage-backed security (MBS) is the parallel shift or spread over the zero-coupon Treasury yield curve required for discounting a pre-determined cash flow schedule to arrive at its present market price. The range, the variance, and the standard deviation are the most common measures of spread or variation. The range is the length of the smallest interval which contains all the data. It is calculated by subtracting the smallest observation (sample minimum) from the greatest (sample maximum).

And the symbol for the standard deviation is just sigma. English dictionary definition of measure. Roses of the South, a waltz by Johann Strauss the Younger n. The spread of a data set can be described by a range of descriptive statistics including variance, standard deviation, and interquartile range.

Spread can also be shown in graphs: dot plots, boxplots, and stem and leaf plots have a greater distance with samples that have a larger dispersion and vice versa.

Learn vocabulary, terms, and more with flashcards, games, and other study tools. When analyzing univariate data, measures of the center and spread are helpful for estimating and predicting. There are several methods for measuring both the center and the spread. The most common method for measuring the center is the mean, an average of the data.

The measures of spread tell us how extreme the values in the dataset are. There are four measures of spread , and we’ll talk about each one of them. It is the difference between the maximum value and the minimum value within the data set.

De–nition For a given set of data, the range is the (positive or occasionally 0) di⁄erence between the largest and smallest values in a quantitative data set. To distinguish these data sets, it is useful to complement a measure of location with a measure of spread or variation. The DTS paper (Ben Lor, Dynkin et al) describes how DTS (duration times spread ) can be used as both an exposure to a common factor, and a measure of specific risk. An interest rate spread specifically refers to the difference in interest rates, also called yiel of two related rates.

A spread is a measure of the difference between two variables. The differences reflected in an interest rate spread can be based on fluctuations in currencies, perceptions of risk and inflation expectations, among other factors. The distance between the two quartiles is the quartile spread , which is a measure of spread of the dataset. Taking the square root solves the problem.

The variance is a squared measure and does not have the same units as the data. The standard deviation measures the spread in the same units as the data. Notice that instead of dividing by n = 2 the calculation divided by n – = – = because the data is a sample.

In practical terms, the lower the number the less the variation there is. To think why CV is generally a better measure for comparing across platforms, consider two distributions that have the same relative spread of about. Spread The spread is the expected amount of variation associated with the output. This tells us the range of possible values that we would expect to see.

Shape The shape shows how the variation is distributed about the location. Definition : Option-adjusted spread (OAS) measures the spread between a fixed income security and the risk-free rate of return, which considers how the embedded option in the fixed income security is likely to change the expected future cash flows and the present value of the security.