Monday, May 5, 2008

Mean Absolute Deviation

The mean deviation is the mean of the absolute deviations of a set of data about the data's mean.

Mean deviation is an important descriptive statistic that is not frequently encountered in mathematical statistics. The mean deviation has a natural intuitive definition as the "mean deviation from the mean".

The average absolute deviation from the mean is less than or equal to the standard deviation.

When applied to time series, the mean absolute deviation becomes a measure of volatility.

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