Standard deviation measures how much an investment’s return has moved above or below its average (mean) return over a specific time period. Higher standard deviation means more ups and downs (higher volatility/risk), while a lower standard deviation means steadier returns (lower volatility/risk). YCharts makes five types of standard deviation metrics available over different time periods: daily, monthly, quarterly, annualized monthly and annualized quarterly:
- Daily - Standard Deviation of Daily Returns measures how much an investment’s returns vary from day to day. It can be useful for understanding the daily ups and downs of an investment’s value
- Monthly - Standard Deviation of Monthly Returns measures how much an investment’s returns vary from month to month. It can help to understand the month-to-month fluctuations in an investment’s returns, smoothing out any daily noise
- Quarterly - Standard Deviation of Quarterly Returns measures how much an investment’s returns vary from quarter to quarter
- Annualized monthly - Annualized Standard Deviation of Monthly Returns converts monthly standard deviation to an annual figure. It provides a sense of an investment’s volatility over a specific time period, based on monthly data
- Annualized quarterly - Annualized Standard Deviation of Quarterly Returns converts quarterly standard deviation to an annual figure. It provides a sense of an investment’s volatility over a specific time period, based on quarterly data
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