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Stock a, has returns of 10%, 20%, 30%, and 40%, over the last four years, The stock's standard deviation will be 12.91%.
Since, Standard deviation = √(10+25)²+ (20%+25%)²+(30%+25%)²+(40%+25%)² ÷ 3
Standard deviation = √500% ÷ 3
= 12.91%
What is the Stock standard deviation?
The standard deviation is a statistical measure that may be used to examine how widely distributed a dataset is in relation to its mean. The variance is expressed as the square root. To calculate the standard deviation, which is equal to the square root of the conflict, it is essential to evaluate the variation among the many data points in relation to the mean. As the distance between the data points and the mean widens, the dataset's deviation grows. In other words, as the quantity of data points rises, the standard deviation also does. When employed in a financial setting, such as when applying it to stock market returns, the standard deviation can be useful because it provides details about the historical volatility of a stock.
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