Standard deviation is a measure of dispersion. In finance, it is widely used as measure of volatility of an investment.
The higher the standard deviation of an asset, the more volatile the asset is.
The Standard deviation is simply the square root of the Variance. The Variance is calculated by taking the sum of the differences between the data values and the mean, squaring the result and then dividing it by the number of data points in the population. This formula applies when working with a complete population. In the case of a sample population, you should divide the result by the number of data points in the population minus one.
