• Is a measure of volatility, risk, or statistical dispersion. The standard deviation is calculated by:
- computing the mean of the series
- then taking the deviation by subtracting the mean from each observation,
- squaring the differences or deviations for each observation,
- dividing the sum of the squared deviations by the number of observations
- and then calculating the positive square root of the sum of squared deviations.
In other words, the standard deviation is the positive square root of the variance.