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.

Semivariance
A measure of the dispersion of all observations that fall below ... 
Downside Risk
An estimation of a security's potential to suffer a decline in ... 
Standard Deviation
1. A measure of the dispersion of a set of data from its mean. ... 
Dispersion
A statistical term describing the size of the range of values ... 
Objective Probability
The probability that an event will occur based an analysis in ... 
Quartile
A statistical term describing a division of observations into ...

Investing
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Investing
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. 
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. 
Investing
How Mutual Funds Chasing Popular Stocks Hurt Alpha
Learn about the Goldman Sachs research report, which concluded that mutual funds overweight holdings of stocks that are less likely to outperform benchmark indices. 
Investing
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. 
Investing
5 Ways To Measure Mutual Fund Risk
These statistical measurements highlight how to mitigate risk and increase rewards. 
Investing
Explaining the Empirical Rule
The empirical rule provides a quick estimate of the spread of data in a normal statistical distribution. 
Investing
Find The Highest Returns With The Sharpe Ratio
Learn how to follow the efficient frontier to increase your chances of successful investing.

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 >> 
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 the difference between the expected return and the standard deviation of ...
Learn about the expected return and standard deviation and the difference between the expected return and standard deviation ... 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 mean?
Understand the basics of calculating and interpreting mean and standard deviation and how these mathematical fundamentals ... 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 >>