Standard deviation: Difference between revisions
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Standard deviation measures the spread of data around their mean. | Standard deviation measures the spread of data around their mean. | ||
The standard deviation is the square root of the | The standard deviation is the square root of the variance. | ||
Standard deviation is used widely as a measure of risk, because it is relatively easy to calculate, and to compare and combine with the standard deviations of other variables. | Standard deviation is used widely as a measure of risk, because it is relatively easy to calculate, and to compare and combine with the standard deviations of other variables. | ||
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* [[Variance]] | * [[Variance]] | ||
* [[Volatility]] | * [[Volatility]] | ||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
Revision as of 14:15, 16 November 2016
(SD).
Standard deviation measures the spread of data around their mean.
The standard deviation is the square root of the variance.
Standard deviation is used widely as a measure of risk, because it is relatively easy to calculate, and to compare and combine with the standard deviations of other variables.
Its order of magnitude is the difference, ignoring the sign, between the mean and a randomly chosen item in the population.
