Variance (VAR)

VAR calculates the statistical variance of price over a specified period (default 5), measuring the average squared deviation from the mean. Variance quantifies volatility mathematically - higher variance means wider price swings and greater uncertainty. The nb_dev parameter (default 1) acts as a multiplier for scaling. Variance is the square of standard deviation (VAR = STDDEV²), and while less intuitive than STDDEV, it's essential for many statistical calculations and portfolio theory applications. Variance has units of 'price squared,' making direct interpretation challenging.

Cryptocurrency traders and analysts use VAR primarily for statistical calculations, portfolio theory applications, and as a component in custom indicators rather than direct trading signals. Rising variance indicates increasing volatility regime; falling variance suggests consolidation. VAR is essential for calculating Sharpe ratios, portfolio variance, and risk metrics in quantitative finance. While STDDEV is preferred for direct volatility measurement (better interpretability), VAR is crucial for mathematical operations requiring variance specifically. It's used by quantitative analysts, portfolio theorists, and researchers building statistical models where variance is the natural metric.