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##### Asked by: Zarek Iribarnegaray

personal finance options# What is the standard deviation of the stock market?

Last Updated: 14th June, 2020

**Standard deviation**is thestatistical measure of

**market**volatility, measuring howwidely prices are dispersed from the

**average**price. Ifprices trade in a narrow trading range, the

**standarddeviation**will return a low value that indicates lowvolatility.

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Then, how do you find the standard deviation of a stock?

**The calculation steps are as follows:**

- Calculate the average (mean) price for the number of periods orobservations.
- Determine each period's deviation (close less averageprice).
- Square each period's deviation.
- Sum the squared deviations.
- Divide this sum by the number of observations.

Likewise, what is the S&P 500 standard deviation? **S&P 500** has current **Standard Deviation**of 0.9259. The **Standard Deviation** is a measure of how spreadout the prices or returns of asset are on average. It is the mostwidly used risk indicator in the field of investing andfinance.

Hereof, what does Standard Deviation tell you?

**Standard deviation** is a number used to**tell** how measurements for a group are spread out from theaverage (mean), or expected value. A low **standard deviation**means that most of the numbers are close to the average. A high**standard deviation** means that the numbers are more spreadout.

What is a good standard deviation?

For an approximate answer, please estimate yourcoefficient of variation (CV=**standard deviation** / mean).As arule of thumb, a CV >= 1 indicates a relatively high variation,while a CV < 1 can be considered low. A "**good**" SD dependsif you expect your distribution to be centered or spread out aroundthe mean.