Standard Deviation

A statistical measure of how spread out an asset returns are around the average.

Standard deviation quantifies the dispersion of returns. A stock returning 10 percent on average with a 20 percent standard deviation has returns that typically range from -10 to +30 percent in a given year. In finance, standard deviation is often used as a proxy for risk.

The fund's high standard deviation warned investors to expect big swings in its yearly returns.