Learn the standard deviation formula, how to calculate it, and its importance in data analysis. Step-by-step guide with examples.

Understanding standard deviation means first understanding variance because standard deviation, mathematically speaking, is the square root of variance.

Standard deviation is a statistic measuring the dispersion of a dataset relative to its mean. It is calculated as the square root of the variance. Learn how it's used.

Key Points Use Excel to calculate daily returns and standard deviation to gauge stock volatility. Annualize volatility by multiplying daily standard deviation by the square root of 252.

But first, here's a look at the formula for calculating annualized volatility. Annualized volatility = standard deviation (volatility) multiplied by the square root of the periods in the year.