DEFINITION of 'Residual Standard Deviation'
A statistical term used to describe the standard deviation of points formed around a linear function, and is an estimate of the accuracy of the dependent variable being measured.
Residual standard deviation is also referred to as the standard deviation of points around a fitted line.
INVESTOPEDIA EXPLAINS 'Residual Standard Deviation'
The residual standard deviation can be calculated when a regression analysis has been performed, as well as an analysis of variance (ANOVA). When determining a limit of quantitation, the use of a residual standard deviation is permissible instead of the standard deviation.
RELATED TERMS

Standard Deviation
1. A measure of the dispersion of a set of data from its mean. ... 
Statistics
A type of mathematical analysis involving the use of quantified ... 
Rescaled Range Analysis
A statistical analysis of a timeseries of financial data that ... 
Analysis Of Variance  ANOVA
A statistical analysis tool that separates the total variability ... 
Regression
A statistical measure that attempts to determine the strength ... 
Statistically Significant
The likelihood that a result or relationship is caused by something ...
RELATED FAQS

What assumptions are made when conducting a ttest?
The common assumptions made when doing a ttest include those regarding the scale of measurement, random sampling, normality ... Read Full Answer >> 
What are some of the more common types of regressions investors can use?
The most common types of regression an investor can use are linear regressions and multiple linear regressions. Regressions ... Read Full Answer >> 
What types of assets produce negative portfolio variance?
Assets that have a negative correlation with each other produce negative portfolio variance. Variance is one measure of the ... Read Full Answer >> 
When is it better to use systematic over simple random sampling?
Under simple random sampling, a sample of items is chosen randomly from a population, and each item has an equal probability ... Read Full Answer >> 
What are some common financial sampling methods?
There are two areas in finance where sampling is very important: hypothesis testing and auditing. The type of sampling methods ... Read Full Answer >> 
How can I measure portfolio variance?
Portfolio variance measures the dispersion of returns of a portfolio. It is calculated using the standard deviation of each ... Read Full Answer >>
Related Articles

Markets
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Investing Basics
Economic Indicators That DoItYourself Investors Should Know
Understanding these investing tools will put the market in your hands. 
Mutual Funds & ETFs
5 Ways To Measure Mutual Fund Risk
These statistical measurements highlight how to mitigate risk and increase rewards. 
Investing
Tips For Investors In Volatile Markets
Find out what to look out for when trading during market instability. 
Mutual Funds & ETFs
Understanding Volatility Measurements
How do you choose a fund with an optimal riskreward combination? We teach you about standard deviation, beta and more! 
Economics
Explaining the Liquidity Coverage Ratio
The liquidity coverage ratio requires banks and other financial institutions to hold enough cash and liquid assets on hand to weather market stress. 
Fundamental Analysis
Calculating Valuation
Valuation is the process of determining what an asset is worth. 
Economics
Will the Selloff in China Hurt the Global Economy?
Though China is the world’s second largest economy, its volatility in the stock market is unlikely to have an impact on the global or Chinese economy. 
Fundamental Analysis
Understanding Qualitative Analysis
Qualitative analysis is a general term describing the nonmathematical scrutiny used by investors and managers to make investment and business decisions. 
Economics
Signs The U.S. Recovery Is Solid
Many market observers lately have been making some pretty pessimistic evaluations of the U.S. economy, declaring that it’s stagnating and soft.