How do you calculate the standard deviation of a stock return?
How do you calculate the standard deviation of a stock return?
To find standard deviation on a mutual fund, add up the rates of return for the period you want to measure and divide by the total number of rate data points to find the average return. Further, take each individual data point and subtract your average to find the difference between reality and the average.
What is the standard deviation of returns?
Standard deviation of returns is a measure of volatility or risk. The larger the return standard deviation, the larger the variations you can expect to see in returns.
What is the portfolio standard deviation?
Definition: The portfolio standard deviation is the financial measure of investment risk and consistency in investment earnings. In other words, it measures the income variations in investments and the consistency of their returns.
How do you calculate the standard deviation of a stock return in Excel?
Standard deviation is the degree to which the prices vary from their average over the given period of time. In Excel, the formula for standard deviation is =STDVA(), and we will use the values in the percentage daily change column of our spreadsheet. In this example, our daily standard deviation is 1.73%.
What is standard deviation in stock market?
Standard deviation is the statistical measure of market volatility, measuring how widely prices are dispersed from the average price. If prices trade in a narrow trading range, the standard deviation will return a low value that indicates low volatility.
What is the standard deviation of stock A?
However, Stock A has a standard deviation of $3.58, while Stock B has a standard deviation of $1.41. She concludes that Stock B’s price fluctuates less than Stock A’s and decides to invest in Stock B.
What is the standard deviation of each stock?
The standard deviation of a stock determines the dispersion of a dataset in relation to its mean. A high standard deviation represents volatile stocks, while a low standard deviation usually points to consistent blue-chip stocks. The greater the standard deviation, the riskier the stock.
