DEFINITION of 'Semideviation'
A measure of dispersion for the values of a data set falling below the observed mean or target value. Semideviation is the square root of semivariance, which is found by averaging the deviations of observed values that have a result that is less than the mean. The formula for semideviation is as follows:
Where:
n = the total number of observations below the mean
r_{t} = the observed value
average = the mean or target value of a data set
BREAKING DOWN 'Semideviation'
In portfolio theory, semideviation evaluates the fluctuations in returns below the mean. It provides an effective measure of downside risk for a portfolio. It's similar to standard deviation, but it only looks at periods where the portfolio's return was less than the target or average level. This allows investors to see how much loss can be expected from a portfolio, instead of only looking at its expected fluctuations.

Objective Probability
The probability that an event will occur based an analysis in ... 
Downside Deviation
A measure of downside risk that focuses on returns that fall ... 
Level 2 Assets
Assets that do not have regular market pricing, but whose fair ... 
Empirical Rule
A statistical rule stating that for a normal distribution, almost ... 
Volatility
1. A statistical measure of the dispersion of returns for a given ... 
Trimmed Mean
A method of averaging that removes a small percentage of the ...

Markets
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Investing Basics
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. 
Investing
Volatility
Learn more about this statistical measure and how it affects the dispersion of returns. 
Forex Education
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. 
Forex Education
Improve Your Investing With Excel
Excel is a useful tool to assist with investment organization and evaluation. Find out how to use it. 
Fundamental Analysis
Explaining the Empirical Rule
The empirical rule provides a quick estimate of the spread of data in a normal statistical distribution. 
Bonds & Fixed Income
Find The Highest Returns With The Sharpe Ratio
Learn how to follow the efficient frontier to increase your chances of successful investing. 
Active Trading Fundamentals
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". 
Fundamental Analysis
How To Measure Your Portfolio’s Performance
The first tool for assessing portfolio performance while considering risk was the Treynor measure. 
Investing Basics
Redefining Investor Risk
Changing the way you think about time and risk can change the way you invest.

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 mean?
Understand the basics of calculating and interpreting mean and standard deviation and how these mathematical fundamentals ... 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 >> 
How are semivariable costs similar to fixed costs?
Learn what fixed costs are, what semivariable costs are, why semivariable costs are similar to fixed costs, and how semivariable ... Read Answer >> 
What is the difference between standard deviation and variance?
Understand the difference between standard deviation and variance; learn how each is calculated and how these concepts are ... Read Answer >> 
What is the best measure of a given stock's volatility?
Understand what metrics are most commonly used to assess a security's volatility compared to its own price history and that ... Read Answer >>