Investment Dictionary  Standard deviation
A measure of volatility, or risk. For example, given a portfolio with a 12% annualized return and an 11% standard deviation, an investor can expect that in 13 out of 20 annual periods (about twothirds of the time) the return on that portfolio will fall within one standard deviatino, or between 1% (12%  11%) and 23% (12% + 11%). The remaining onethird of the time an investor should expect that the annual return will fall outside the 1%  23% range. Two standard deviations (11% x 2) would account for 95% (19 out of 20 periods). The range of expected returns would be between 10% (12%  22%) and 34% (12%+22%). The greater the standard deviation, the greater the volatility of a portfolio. Standard deviation can be measured for varying time periods. For example, you can have a monthly standard deviation or an annualized standard deviation measuring the volatility for a given time frame.
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