what does standard deviation measure 
standard deviation is a statistical measurement in finance that when applied to the annual rate of return of an investment sheds light on that investment s historical volatility the greater the standard deviation of securities the greater the variance between each price and the mean which shows a larger price range for example a volatile stock has a high standard deviation while the deviation of a stable blue chip stock is usually rather low standard deviation formulastandard deviation is calculated by taking the square root of a value derived from comparing data points to a collective mean of a population the formula is standard deviation is calculated as follows 