Standard Deviation financial definition of Standard Deviation. Standard Deviation finance term by the Free Online Dictionary.

Standard deviation

The square root of the variance. A measure of dispersion of a set of data from its mean.

Historical Volatility

A measure of a security's stability over a given period of time. While there are various ways to calculate it, the most common way is to compute the average deviation from the average price over the period of time one wishes to measure. The historical volatility is often compared to the implied volatility to determine if a security is overvalued or undervalued. Generally, securities with a higher historical volatility carry more risk. It is also called realized volatility or the standard deviation. See also: Volatility.

standard deviation

A statistical measure of the variability of a distribution. An analyst may wish to calculate the standard deviation of historical returns on a stock or a portfolio as a measure of the investment's riskiness. The higher the standard deviation of an investment's returns, the greater the relative riskiness because of uncertainty in the amount of return. See also risk, variance.

Standard deviation. Standard deviation is a statistical measurement of how far a variable quantity, such as the price of a stock, moves above or below its average value. The wider the range, which means the greater the standard deviation, the riskier an investment is considered to be.

Some analysts use standard deviation to predict how a particular investment or portfolio will perform. They calculate the range of the investment's possible future performances based on a history of past performance, and then estimate the probability of meeting each performance level within that range.

Standard Deviation

What Does Standard Deviation Mean?

(1) A measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. The standard deviation is calculated as the square root of the 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 also is known as historical volatility and is used by investors as a gauge for the amount of expected volatility.

Investopedia explains Standard Deviation

Standard deviation is a statistical measure that helps shed light on an investment's historical volatility. For example, a volatile stock will have a high standard deviation, whereas the deviation of a stable blue-chip stock will be lower. A large dispersion indicates how much the return on an investment deviates from the expected normal returns.

Related Terms:
• Beta
• Bollinger Bands
• Coefficient of Variation—CV
• Covariance
• Volatility

Mentioned in	?		References in periodicals archive	?		Financial browser	?		Full browser	?
Appraisal Ratio Black Scholes Model Black-Scholes Option-Pricing Model Bollinger Band Bollinger Bands Coefficient of Variation Desvio estandar Hyoujun Hensa Reward-to-Volatility Ratio risk Risk-Reward Ratio Sharpe Ratio Standardized Normal Distribution Standardized Value Statistical Tracking Error Volatility Z Score	The interval between the upper and lower bands and the middle band is determined by volatility, typically the standard deviation of the same data that were used for the average. Bollinger Bands by International Business Times - US ed. Bollinger Bands use a set moving average (20-Day SMA) with two trading bands above and below the moving average that are a determined standard deviation away from the moving average. EUR/CHF Spotlight: Indicator of the Day by Mena Report In order to place the information from these tests on a common scale, we followed the standard practice of standardizing all scores by test, grade, and year to have a mean of zero and standard deviation of one. For-profit and nonprofit management in Philadelphia schools: what ... by Peterson, Paul E.; Chingos, Matthew M. / Education Next	Stale Price Stale Price Arbitrage Stalking Horse Stalking Horse Bid Stalwart Stamp Duty Stamp Tax Stand up to Stand-Alone Company Stand-Alone Principle Standard & Poor's Standard & Poor's 100 Stock Index Standard & Poor's 400 Stock Index Standard & Poor's 500 Index Standard & Poor's 500 Stock Index Standard & Poor's Confidence Indicator Standard & Poor's Depositary Receipt Standard & Poor's MidCap 400 Index Standard & Poor's Midcap Index Standard & Poor's SmallCap 600 Index Standard & Poor's Underlying Rating Standard & Poor's/Citigroup Growth and Value Indexes Standard & Poor'sr Standard Deduction standard depth Standard Deviation Standard Error Standard Industrial Classification Standard Industrial Classification Code Standard Industrial Classification System standard metropolitan statistical area standard mortgage clause standard of care Standard Opinion standard practices of the trade Standardized Normal Distribution Standardized Value Standby Agreement standby commitment standby fee standby letter of credit Standby Underwriter Standby Underwriting standing standing timber Standstill Agreement Stanza di compensazione stapled stock Starker transaction Start-Up Start-Up Company	Standard de Stat standard death certificate Standard deduction Standard deduction Standard Deduction for Health Insurance Standard Deductions Standard Deductions Standard Default Assumption Standard Defence Supply System Standard definition Standard definition Standard Definition High Capacity Standard definition television Standard Delay File Standard Delay Format Standard Delivery Date Standard Depot Level Maintenance Standard Depot System standard depth standard depth-pressure recorder Standard Design and Development Process Standard Design Criteria Standard Design Guide Standard Desktop Configuration Standard Detailed Site Assessment Standard Development Kit standard deviate Standard Deviation Standard Deviation between Replicates Standard Deviation Distance Measure Standard Deviation Index Standard Deviation of a Single Height Measurement Standard Deviation of Color Matching Standard Deviation of Lateral Position Standard Deviation of Normal to Normal Standard Deviation of Normal-to-Normal Intervals Standard Deviation of Nucleolar Area Standard Deviation of Pixel Ratio Standard Deviation of Prediction Standard Deviation of Respiration Rate Standard Deviation of Run Length Standard Deviation of the Averages of NN Standard Deviation of the Error Standard Deviation of the Mean Standard Deviation of the Nuclear Perimeter Standard Deviation of the Number of Delayed Frames Standard Deviation Percent Mean Standard Deviation Related to Quality Standard Deviation Score Standard Deviation Score for Length Standard Deviation Score of Height for Chronological Age Standard deviations Standard deviations Standard deviations Standard deviations

Mentioned in

References in periodicals archive

Financial browser

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Appraisal Ratio
Black Scholes Model
Black-Scholes Option-Pricing Model
Bollinger Band
Bollinger Bands
Coefficient of Variation
Desvio estandar
Hyoujun Hensa
Reward-to-Volatility Ratio
risk
Risk-Reward Ratio
Sharpe Ratio
Standardized Normal Distribution
Standardized Value
Statistical Tracking Error
Volatility
Z Score

The interval between the upper and lower bands and the middle band is determined by volatility, typically the standard deviation of the same data that were used for the average.

Bollinger Bands by International Business Times - US ed.

Bollinger Bands use a set moving average (20-Day SMA) with two trading bands above and below the moving average that are a determined standard deviation away from the moving average.

EUR/CHF Spotlight: Indicator of the Day by Mena Report

In order to place the information from these tests on a common scale, we followed the standard practice of standardizing all scores by test, grade, and year to have a mean of zero and standard deviation of one.

For-profit and nonprofit management in Philadelphia schools: what ... by Peterson, Paul E.; Chingos, Matthew M. / Education Next

Stale Price

Stale Price Arbitrage

Stand-Alone Principle

Standard & Poor's