What is 'Standard Deviation'?

The standard deviation is a statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Standard Deviation The standard deviation is a statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance. It is calculated as the square root of variance by determining the variation between each data point relative to the mean. If the data points are further from the mean, there is higher deviation within the data set; thus, the more spread out the data, the higher the standard deviation. Breaking it Down: In the financial services industry, standard deviation is one of the key fundamental risk measures that... Read More » Related to "Standard Deviation" 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 and determine risk in the investment industry. Read More » What is the difference between standard deviation and variance? Understand the difference between standard deviation and variance; learn how each is calculated and how these concepts are useful to investors. Read More » What is the difference between standard deviation and Z-score? Understand the basics of standard deviation and Z-score, and learn how each is calculated and used in the assessment of market volatility. Read More » Related Definitions Volatility Volatility measures how much the price of a security, derivative, or index fluctuates. Read More » Mean-Variance Analysis Mean-variance analysis is the process of weighing risk against expected return. Read More » Dispersion Dispersion is a statistical term that describes the size of the range of values expected for a particular variable. Read More » Standard Error Standard error is the standard deviation of a sample population. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy