Best performing mutual funds low devistion
It is calculated as the square root of variance. The higher the standard deviation, the greater the fluctuation is. The words volatility and standard deviation are used interchangeably. In other words, it is a measure of how much deviation occurs from the expected return of the instrument in question. In finance, standard deviation refers to a statistical measure representing the volatility or risk in a market instrument such as stocks, mutual funds etc. What is Standard Deviation?Ī tool of statistics, standard deviation is used to measure variation from an arithmetic mean.
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Market volatility is usually measured with the help of beta ratio and standard deviation. Being reactionary to the volatility in the market can prove to be detrimental to the investors interest in the longer run. Volatility in the market provides the investors an impression that they are losing out on money, but that is not necessarily true. A highly volatile fund poses greater risk to the investor than a fund with lower volatility.
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Volatility is not the same as risk, but it is an anticipation or reaction to a risk event.
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It is usually measured by calculating the average difference between the highest and lowest price of the asset. Volatility refers to the extent to which a fund’s net asset value (NAV) fluctuates over a period of time.