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Standard Deviation
Term category: Stocks
In 10 words or less:  A statistical measure that approximates a stock's volatility.

Definition: The standard deviation of a stock measures its volatility.  In investing, volatility is synonymous with risk, so one could say standard deviation measures total risk.

StockJargon Advice: The higher a stock's standard deviation, the higher the risk.  For example, a stock with a mean annual return of 8% and a standard deviation of 4% is less risky than one with the same return and a standard deviation of 22%.

 

 

 

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