Standard Deviation

Standard Deviation

Has 3 definitions based on different standards:

1.  Standard Deviation in Investment: Measurement of the volatility of a security, obtained from the security’s past returns, and used in assuming the range of future returns if possible. Standard deviation is directly proportional to the potential for volatility, higher the standard deviation greater is thepotential for volatility.

2. Standard Deviation in Marketing: Measurement of the difference between an arithmetic mean and a person’s individual value included in the average, for example the variation between the reaction to the same object in different possible ways.

3. Standard Deviation in Statistics: It is the easure of the unpredictability of a random variable, expressed as the average deviation of a set of data from its arithmetic mean and computed as the positive square root of the variance.

It is represented by the lower-case Greek letter sigma (s).

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