Standard deviation

Standard deviation is still the most widely used measure of dispersion, or in financial markets, risk.

Standard deviation (SD) is still the most widely used measure of dispersion, or in financial markets, risk.That all sounds a bit technical but it's actually pretty straightforward to understand.

It is based on the idea that any population is "normally distributed" in other words, whether it contains the height of every UK adult female, or the annual return from the FTSE 100 over 100 years, most members of a given group will be bunched around the arithmetic average for the whole group.

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