In general the shorter the starting stacks the less the overall skill and the greater the variance.
One of the things you have to realize about big bet poker is that the shorter the stacks are at the table the less skill there is involved to win especially in the short term. This can be very deceiving when you first start playing cash games or tournaments as in smaller cash games the buy-ins are usually heavily restricted and in smaller buy-in tournaments the blinds move up fast and you do not get many starting chips.
Unfortunately, unless you are playing some of the bigger buy-in tournaments tournament play will always have a lot of luck involved with it and a ton of short-term variance. Especially in live play it can be extremely difficult to even know if someone is a +EV player in MTTs with the high rake and slow pace of play. I know a lot of big winning cash game players, and I include myself in this category, that have never made a major score in a live tournament and are most likely down in their careers overall. Does this mean that they are bad tournament players? Absolutely not. In fact I would take a lot of these players over other so called tournament super stars in deeper stacked structures and most of their lack of success comes from being on the bad side of variance and lack of volume.
However, luckily for those who are trying to play poker for profit, cash games now have deeper stacked restricted buy-in structures even at the small stakes. I remember before 2008 where there were only uncapped no limit games, usually $5-10 and higher and then forty big blind capped games. There was absolutely nothing in between. At the Commerce Casino in Los Angeles, which is where I play most of my poker, they had a huge gap between the uncapped $10-20 game and the next smallest game, which was a $400 max buy-in $5-10 structure. That’s right a $5-10, no limit game capped at a forty big blind buy-in. It was a pretty ludicrous setup and much like the game below that, which was a $2-$5, $200 cap buy-in, had huge variance. There were times in that game where I might go on twenty buy-in downswings doing almost nothing wrong. It is really tough to fold overpairs that shallow and it was not all that bad for your opponents to flop top pair or some sort of draw and just push you all-in.
When the Commerce introduced the $500-$1500 buy-in $5-$10 game, a game I played full time from 2008-2010, I found that my variance drastically decreased. In fact, there were only two times during that period where I matched my largest downswing in the $400 game and I was buying in for three times as much!! My results support my contention that players that are skilled have more of an advantage in deeper stack play and thus their winrates will be increased. With a larger winrate your standard deviation decreases and you go through smaller (proportionally) downswings.
Eventually, the Commerce eliminated the $400 game and instituted a $5-$5 $300-$500 cap game. Now even though the cap in this game is only 100BBs, the structure is far better than its 40BB predecessor and lends itself to the better players having more advantage over the weaker ones. This game is still not as good as a 200BB-capped game, which now you can find at several different casinos in Los Angeles at the $5 blind level.
The reason why it is important to understand how stack size correlates to variance is because if you feel like you are a winning player you should try and work on your game so that you are comfortable sitting as deep as possible. That is usually where your largest winrate will be found. That is not to say that you cannot play a shorter stack profitably but with the slow pace and fewer hands in live poker you will find that playing deeper will usually equate to a higher hourly rate, which is how winning players judge their live performance.