Variance is a statistical measure of how much a set of observations differ from each other. In accounting and financial analysis, variance also refers to how much an actual expense deviates from the budgeted or forecast amount.Click to see full answer. Accordingly, how do you find the variance in finance?Variance is calculated by taking the differences between each number in the data set and the mean, then squaring the differences to make them positive, and finally dividing the sum of the squares by the number of values in the data set.Similarly, what is an example of variance? Unlike range and quartiles, the variance combines all the values in a data set to produce a measure of spread. It is calculated as the average squared deviation of each number from the mean of a data set. For example, for the numbers 1, 2, and 3 the mean is 2 and the variance is 0.667. In respect to this, what does the variance tell us? Variance measures how far a set of data is spread out. A high variance indicates that the data points are very spread out from the mean, and from one another. Variance is the average of the squared distances from each point to the mean.What is standard deviation in finance?Standard deviation is a statistical measurement in finance that, when applied to the annual rate of return of an investment, sheds light on the historical volatility of that investment. For example, a volatile stock has a high standard deviation, while the deviation of a stable blue-chip stock is usually rather low.