# standard deviation

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standard deviation
A standard deviation tells us how much specific examples vary from the average in a particular set. Thus, the larger the standard deviation, the more diverse/volatile are the examples. The more volatile the examples, the less predictable and riskier are the results. In short, standard deviation is used to measure/quantify investment risk. If a set of prices, for example, is close to the average ( mean), then we have a low standard deviation and more stable results. By comparing standard deviations for various investments, we can compare the consistency of performance among those various investments. The CENTER ONLINE Futures Glossary
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A statistical measure of the extent to which measurements vary from their mean. A quantification of the dispersion for a set of data. For example, if the high temperature each day in one four-day period was 70 degrees, 71 degrees, 69 degrees, and 70 degrees, that four-day period has a mean ( average) high temperature of 70 degrees. A second four-day period might have high temperatures of 70 degrees, 60 degrees, 80 degrees, and 70 degrees. That second period also has an average high temperature of 70 degrees. Even though both four-day periods had the same average high temperature, they were quite different. In the first period, the standard deviation is quite small. There is little dispersion. In the second period, the standard deviation is much larger. American Banker Glossary
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The square root of the variance. A measure of dispersion of a set of data from its mean. Bloomberg Financial Dictionary

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standard deviation standard deviation deviation

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A statistical measure of the amount by which one value in a range of values is likely to vary from the mean value. It is used as a method of assessing how variable or volatile a price is likely to be. The bigger the standard deviation the more widespread are the price movements and the more volatile the performance of the stock or financial instrument.

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standard deviation UK US noun [C or U] GRAPHS & CHARTS, MEASURES
a measurement of the degree to which each number in a set of numbers is different from the average: standard deviation from sth »

A fund's performance is measured using its standard deviation from the average profits of all the funds in its category.

### Look at other dictionaries:

• standard deviation — n. Statistics a measure of variability equal to the square root of the arithmetic average of the squares of the deviations from the mean in a frequency distribution …   English World dictionary

• Standard deviation — In probability and statistics, the standard deviation is a measure of the dispersion of a collection of values. It can apply to a probability distribution, a random variable, a population or a data set. The standard deviation is usually denoted… …   Wikipedia

• Standard deviation — The square root of the variance. A measure of dispersion of a set of data from their mean. The New York Times Financial Glossary * * * standard deviation standard deviation ➔ deviation * * *    A statistical measure of the amount by which one… …   Financial and business terms

• 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… …   Investment dictionary

• standard deviation — (sd)    a mathematical unit used to describe the spread or dispersion of a set of data. Each item in the data set has a deviation from the mean (the ordinary average) of the data. The standard deviation is computed by taking the squares of these… …   Dictionary of units of measurement

• standard deviation — UK / US noun [countable] Word forms standard deviation : singular standard deviation plural standard deviations maths a number that shows how much smaller or larger a number in a set of numbers is from the average of the set …   English dictionary

• standard deviation — noun the square root of the variance (Freq. 8) • Topics: ↑statistics • Hypernyms: ↑variance * * * ˌstandard deviˈation [standard deviation] …   Useful english dictionary

• standard deviation — A measure of the dispersion of statistical data. For a series of n values x1, x2, xn, it is given by the formula →[(l n) ∑ (xi x)] where x is the average of the n values. The standard deviation of the returns from an investment can be used as a… …   Big dictionary of business and management

• Standard deviation — A statistic used in *probability distribution models. In a *normal distribution of a *population of random items, the standard deviation represents the typical distance of an item from the population’s *mean value …   Auditor's dictionary

• standard deviation — standartinis nuokrypis statusas T sritis biomedicinos mokslai apibrėžtis ↑Kintamojo reikšmių sklaidos apibūdinimas. Standartinis nuokrypis lygus teigiamai kvadratinės šaknies iš ↑dispersijos reikšmei. atitikmenys: angl. standard deviation… …   Lithuanian dictionary (lietuvių žodynas)