Arithmetic Average: When to Use It and When Not

Arithmetic Average Has Strengths and Weaknesses

Arithmetic average is the most popular measure of central tendency and (the reason for its popularity is that) it is the easiest one to calculate. However, like every other statistical measure, arithmetic average has strengths and weaknesses and it is more suitable in some situations than in others. The following is a summary of situations when using arithmetic average is appropriate and those when arithmetic average should be replaced or complemented by other measures.

When to Use Arithmetic Average

When Not to Use Arithmetic Average (Alone)

Getting a More Complete Picture

In many cases it helps to use arithmetic average together with other measures, such as median or standard deviation. You can easily calculate these and other statistics in Excel using the Descriptive Statistics Calculator.

Related pages

cboe option calculatormean sd calculatorstock volatility calculatormsft stock split historydelta calculator optionshow to compute skewnesssharpe ratio financeeurusd etfinferential statistics calculatorrsi indicator formulastoxx 50 europeindicative price meaningetf correlationcboe historywhat is an etn vs etfrecent 13f filingsnatural log in exceldifference between population variance and sample variancemacd calculation excelhow to buy the vixthe black scholes option pricing modelmean and standard deviation calculatorblack scholes pricing modelcomputation formula for sample variancecalculate coefficient of skewnessmodel black scholeswhat does oversold mean in the stock marketrsi share pricehistorical vixexplanation of excel formulasthe black-scholes equationnorm.s.distvariance statseur usd etfcalculating standard deviation on excelticker vxxvix etnworking out standard deviation on excelcalculating the sample varianceblack scholes methodeuro stoxx 50 wikioption straddle strategiesexplain kurtosisvix fundrealized yield calculatorwhat is black scholes option pricing modellog formula in excelshortcut formula for variancestandard deviation of a sample calculator13f secvariance function excelwhat is percent deviationcalculation of skewnessinception calculatorspx settlement valuemeaning of derivatives in share marketstatistics excel formulascalculating the median in excelcost variance calculationmedian calculation excelpayoff diagrams for call and put optionsstandard deviation financial calculatorhow the vix is calculatedvariance calculator excelpopulation mean equations&p 500 vixvix future settlementhedge arbitrageblack scholes vega formulanifty call put option calculatoroptions calls and puts for dummies