What is the 'Empirical Rule'
The empirical rule is the statistical rule stating that for a normal distribution, almost all data will fall within three standard deviations of the mean. Broken down, the empirical rule shows that 68% will fall within the first standard deviation, 95% within the first two standard deviations, and 99.7% will fall within the first three standard deviations of the mean.
Also referred to as the Three Sigma Rule, or the 689599.7 Rule.
BREAKING DOWN 'Empirical Rule'
The Empirical Rule is most often used in statistics for forecasting final outcomes. After a standard deviation is calculated, and before exact data can be collected, this rule can be used as a rough estimate as to the outcome of the impending data. This probability can be used in the meantime as gathering appropriate data may be time consuming, or even impossible to obtain.

Residual Standard Deviation
A statistical term used to describe the standard deviation of ... 
Standard Deviation
1. A measure of the dispersion of a set of data from its mean. ... 
Standard Error
The standard deviation of the sampling distribution of a statistic. ... 
Downside Deviation
A measure of downside risk that focuses on returns that fall ... 
Bell Curve
The most common type of distribution for a variable. The term ... 
ThreeSigma Limits
A statistical calculation that refers to data within three standard ...

Markets
Explaining the Empirical Rule
The empirical rule provides a quick estimate of the spread of data in a normal statistical distribution. 
Managing Wealth
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Trading
Trading With Gaussian Models Of Statistics
The entire study of statistics originated from Gauss and allowed us to understand markets, prices and probabilities, among other applications. 
Trading
A Simplified Approach To Calculating Volatility
Though most investors use standard deviation to determine volatility, there's an easier and more accurate way of doing it. 
Trading
Improve Your Investing With Excel
Excel is a useful tool to assist with investment organization and evaluation. Find out how to use it. 
Managing Wealth
Using Normal Distribution Formula To Optimize Your Portfolio
Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk. 
ETFs & Mutual Funds
Stock Market Risk: Wagging The Tails
The bell curve is an excellent way to evaluate stock market risk over the long term. 
Trading
How To Convert Value At Risk To Different Time Periods
Volatility is not the only way to measure risk. Learn about the "new science of risk management". 
Investing
A Simplified Approach To Calculating Volatility
Volatility is sometimes greater than anticipated, but the way it’s measured can compound the problems that occur when it’s unexpected. 
ETFs & Mutual Funds
Are Your ETFs Too Risky? Learn How to Evaluate Them
Learn how to identify ETFs with greater risk and volatility. See why some investors include higher volatility ETFs in pursuit of greater returns.

What does standard deviation measure in a portfolio?
Dig deeper into the investment uses of, and mathematical principles behind, standard deviation as a measurement of portfolio ... Read Answer >> 
How is standard deviation used to determine risk?
Understand the basics of calculation and interpretation of standard deviation and how it is used to measure risk in the investment ... Read Answer >> 
What is the difference between standard deviation and average deviation?
Understand the basics of standard deviation and average deviation, including how each is calculated and why standard deviation ... Read Answer >> 
What is standard deviation used for in mutual funds?
See how standard deviation is helpful in evaluating a mutual fund's performance. Use it in combination with other measurements ... Read Answer >> 
How is risk aversion measured in Modern Portfolio Theory (MPT)?
Find out how risk aversion is measured in modern portfolio theory (MPT), how it is reflected in the market and how MPT treats ... Read Answer >> 
What is the difference between standard deviation and mean?
Understand the basics of calculating and interpreting mean and standard deviation and how these mathematical fundamentals ... Read Answer >>