How to calculate revenue and expense variance to the budget Before analyzing what budget variances mean, they must first be calculated.

We'll calculate the historical monthly variance of the S&P 500 Total Return Index over a five-year period from August 2010 through July 2015 -- that's 60 observations (5 years x 12 months).

To calculate statistical variance in Microsoft Excel, use the built-in Excel function VAR.

There are three methods of calculating Value at Risk (VaR), including the historical method, the variance-covariance method, and the Monte Carlo simulation.