Standard Deviation

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Dictionary Says

Definition of 'Standard Deviation'

1. A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of variance. 

2. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility. Standard deviation is also known as historical volatility and is used by investors as a gauge for the amount of expected volatility.
Investopedia Says

Investopedia explains 'Standard Deviation'

Standard deviation is a statistical measurement that sheds light on historical volatility. For example, a volatile stock will have a high standard deviation while the deviation of a stable blue chip stock will be lower. A large dispersion tells us how much the return on the fund is deviating from the expected normal returns. 
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'Standard Deviation'

  • CFA Level 1 Study Guide - Quantitative Methods - Standard ...

    http://www.investopedia.com/exam-guide/cfa-level-1/quantitative-methods/standard-deviation-and-variance.asp
    ... And Market Returns; 2.10 Basic Statistical Calculations; 2.11 Standard Deviation
    And Variance; 2.12 Skew And Kurtosis; 2.13 Basic Probability ...

  • Hedge Funds: Risks | Investopedia

    http://www.investopedia.com/university/hedge-fund/risks.asp
    We take a look at different types of hedge fund risk, from standard deviation
    to the hedge fund manager. ... Figure 2: Standard Deviation Chart. ...

  • How To Convert Value At Risk To Different Time Periods

    http://www.investopedia.com/articles/04/101304.asp
    ... We do not need a standard deviation for neither the historical method (because ... Recall
    that the daily standard deviation for the QQQ since inception is 2.64%. ...

  • A Simplified Approach To Calculating Volatility

    http://www.investopedia.com/articles/basics/09/simplified-measuring-interpreting-volatility.asp
    Though most investors use standard deviation to determine volatility,
    there's an easier and more accurate way of doing it. ...

  • Improve Your Investing With Excel

    http://www.investopedia.com/articles/basics/10/using-excel-to-invest.asp
    ... Another valuable feature of Excel is that it can automatically calculate
    an investment's or portfolio's standard deviation. The ...

  • Stock Market Risk: Wagging The Tails

    http://www.investopedia.com/articles/financial-theory/09/bell-curve-wag-tails.asp
    ... of an annualized return and, while it would be helpful, is not always presented
    along with that return's risk history as measured by its standard deviation. ...

  • Tips For Investors In Volatile Markets

    http://www.investopedia.com/articles/02/051502.asp
    ... Volatility is typically measured by the standard deviation of the return of
    an investment. Standard deviation is a statistical concept ...

  • The Uses And Limits Of Volatility

    http://www.investopedia.com/articles/04/021804.asp
    ... Volatility = Annualized Standard Deviation Unlike implied volatility - which belongs
    to option pricing theory and is a forward-looking estimate based on a ...

  • Trading With Gaussian Models Of Statistics

    http://www.investopedia.com/articles/financial-theory/10/gaussian-models-statistics.asp
    ... To find out more, read Quantitative Analysis Of Hedge Funds and Multivariate Models:
    The Monte Carlo Analysis.) Standard Deviation and Variance If the values ...

  • Find The Highest Returns With The Sharpe Ratio

    http://www.investopedia.com/articles/07/sharpe_mpt.asp
    ... definition of the Sharpe ratio for a portfolio is the excess returns of the portfolio
    over the risk-free rate divided by the portfolio's standard deviation. ...

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