DEFINITION of 'Semivariance'
A measure of the dispersion of all observations that fall below the mean or target value of a data set. Semivariance is an average of the squared deviations of values that are less than the mean. The formula for semivariance 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 the data set
INVESTOPEDIA EXPLAINS 'Semivariance'
Semivariance is similar to variance; however, it only considers observations below the mean. A useful tool in portfolio or asset analysis, semivariance provides a measure for downside risk. While standard deviation and variance provide measures of volatility, semivariance only looks at the negative fluctuations of an asset. By neutralizing all values above the mean, or an investor's target return, semivariance estimates the average loss that a portfolio could incur.
For risk averse investors, solving for optimal portfolio allocations by minimizing semivariance would limit the likelihood of a large loss.

Variance
The spread between numbers in a data set, measuring Variance ... 
Analysis Of Variances  ANOVA
An analysis of the variation between all of the variables used ... 
Volatility
1. A statistical measure of the dispersion of returns for a given ... 
Asset Allocation
An investment strategy that aims to balance risk and reward by ... 
Modern Portfolio Theory  MPT
A theory on how riskaverse investors can construct portfolios ... 
Downside Risk
An estimation of a security's potential to suffer a decline in ...

Markets
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Fundamental Analysis
Find The Right Fit With Probability Distributions
Discover a few of the most popular probability distributions and how to calculate them. 
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
Bet Smarter With The Monte Carlo Simulation
This technique can reduce uncertainty in estimating future outcomes. 
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". 
Options & Futures
An Introduction To Value at Risk (VAR)
Volatility is not the only way to measure risk. Learn about the "new science of risk management". 
Active Trading
Modern Portfolio Theory: Why It's Still Hip
See why investors today still follow this old set of principles that reduce risk and increase returns through diversification. 
Economics
Understanding Perpetuity
Perpetuity means without end. In finance, a perpetuity is a flow of money that will be received on a regular basis without a specified ending date. 
Fundamental Analysis
What is a Null Hypothesis?
In statistics, a null hypothesis is assumed true until proven otherwise. 
Investing
How to Use Stratified Random Sampling
Stratified random sampling is a technique best used with a sample population easily broken into distinct subgroups. Samples are then taken from each subgroup based on the ratio of the subgroup’s ...