Skip to main content
Asked a question last year

Can standard deviation be used to track volatalitty?

Join FYERS Community to pick others' brains on Trading/Investing

Yes Standard deviation can be used to track volatility as it is statistical measure of market volatility, measuring how widely prices are dispersed from the average price. If prices trade in a narrow trading range, the standard deviation will return a low value that indicates low volatility and vice versa.

Yes! As pointed out by Suruchi, standard deviation is a measure of volatility in that it tells how far the observations in a data set are situated from the mean.

To learn about standard deviation including how to calculate it in Microsoft Excel and how to annualize it, we suggest you read this School of Stocks chapter. The link for the same is shared below.

https://fyers.in/school-of-stocks/chapter/risk-and-money-management/mean_variance_and_standard_deviation.html94