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Standard deviation is a statistical term used in finance as a risk calculation of any security and their rewards. there are basically two ways of calculate the standard deviation of stock returns, one's is a way where we know about the probability of that return i.e we have an idea about the occurrence of returns and the second way where we don't have enough knowledge of market trends and not estimate the chances of occurrence.
General formula to calculate the standard deviation of stock return is:
= Sum(r-r bar).pr (whole under-root)*100
r= Actual Returns
r bar= Expected returns (r*pr)
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Following our colleagues specialists' answers and replies.
As I know Standard Deviation of Stock is a statistical measurement, applied to the annual rate of return or expected return of an investment.
Now to calculate the SDC follow the statistical measurement by R factor:
R1: Actual Rate of Return
Ravg: Average Rate of Return
N: Number of time periods (for manual purpose)
on Excel (IT) use the following formulas to determine.
-Nov 4.8 0. =(6.7/4.8)-1 (to calculate)
-Nov 6.7 0.
-Nov 7.2 0.
-Nov .1 0.
-Nov.4 0.
-Nov.7 (0.)
Standard Deviation for the period =STDEV.S(select all) to convert the standard deviation for this period to
annualized =SQRT(trading days per year)*Standard Deviation for the Period.
