Standard Deviation
Standard deviation is a statistical measure of the spread of data points in a data set relative to the mean. It is calculated by taking the square root of the variance, which is the average of the squared differences from the mean. Standard deviation is used to measure the volatility of a stock, the risk of a portfolio, or the variability of a population. It is also used to measure the accuracy of a statistical model.
History of Standard Deviation
Standard deviation was first introduced by Karl Pearson in the late 19th century. Pearson was a mathematician and statistician who developed the concept of standard deviation as a measure of the spread of data points in a data set. Since then, standard deviation has become an important tool in the field of statistics and is used to measure the variability of a population or the risk of a portfolio.
Table of Comparisons
| Statistic | Mean | Standard Deviation |
|---|---|---|
| Stock Price | $50 | $2 |
| Portfolio Return | 10% | 5% |
| Population Size | 1000 | 100 |
Summary
Standard deviation is a statistical measure of the spread of data points in a data set relative to the mean. It is used to measure the volatility of a stock, the risk of a portfolio, or the variability of a population. It is also used to measure the accuracy of a statistical model. For more information about standard deviation, you can visit websites such as Investopedia, Stat Trek, and Khan Academy.
See Also
- Variance
- Coefficient of Variation
- Mean Absolute Deviation
- Mean Squared Error
- Root Mean Squared Error
- Z-Score
- Confidence Interval
- Probability Distribution
- Regression Analysis
- Correlation Coefficient
