read more signifies the there is a large variance in a given number of stocks in a particular portfolio, whereas, on the other hand, a low standard deviation signifies a less variance of stock among themselves. A high standard deviation of a portfolio Standard Deviation Of A Portfolio Portfolio standard deviation refers to the portfolio volatility calculated based on three essential factors: the standard deviation of each of the assets present in the total portfolio, the respective weight of that individual asset, and the correlation between each pair of assets of the portfolio.Standard deviation is most widely used and practiced in portfolio management services, and fund managers often use this basic method to calculate and justify their variance of returns in a particular portfolio.
#CAN YOU CALCULATE WEIGHTED STANDARD DEVIATION HOW TO#
You are free to use this image on your website, templates etc, Please provide us with an attribution link How to Provide Attribution? Article Link to be Hyperlinked The formula of standard deviation is given below But if it is larger then data points spreads far from the mean. If it is smaller then the data points lies close to the mean value, thus shows reliability. Standard Deviation (SD) is a popular statistical tool that is represented by the Greek letter ‘σ’ and is used to measure the amount of variation or dispersion of a set of data values relative to its mean (average), thus interpret the reliability of the data.
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