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The square root of the variance
. A measure of dispersion of a set of data from its mean
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
. Generally, securities with a higher historical volatility carry more risk
. It is also called realized volatility or the standard deviation. See also: Volatility
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
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.