The wider the dispersion of returns on a stock, the higher the standard deviation.
The difference between each price and the mean, which reveals a wider price range, increases with a security's standard deviation.
The volatility of investment return is measured by a standard deviation in the world of finance. A wider range of results is often seen as the higher the standard deviation. A small standard deviation, on the other hand, usually indicates a more stable investment.
The standard deviation may be used to estimate market volatility or the variation in asset values from their mean price. The standard deviation increases when prices fluctuate erratically, signaling a riskier investment. Investments have minimal risk because of low standard deviation, which indicates stable pricing.
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