Standard deviation is a metric that shows the variability of a security’s returns over time. It can be used to gauge volatility based on past performance and compare a future return to past returns.

Discover normal distribution—a critical concept in finance—and its key properties, formula, and real-world applications.

Paid non-client promotion: Affiliate links for the products on this page are from partners that compensate us (see our advertiser disclosure with our list of partners for more details). However, our ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Andy Smith is a Certified Financial Planner ...

In response to my article, Is the Stock Market Too Concentrated?, which relied upon standard-deviation calculations to assess investment risk, a reader wrote: “My problem [with your argument] is ...