How is Average Hydropathy computed?

It is computed simply by the sum of hydrophobicity of individual amino acid divide by the length of the protein sequence (exclusive of non-standard amino acid characters).
Hydrophobicity values of individual amino acids can be found here.

Note: If a character in the protein sequence is not of the 20 standard amino acid, it will not be included in the computation. i.e. the length will also be adjusted such that only standard amino acid characters are considered.