Standard deviation vs. Semi standard deviation as measures of risk in finance
Some suggest that semi standard deviation is more relevant because it doesn’t incorporate returns above the mean or any threshold in the computation of risk. I have calculated the semi standard deviation (from the mean and from a threshold) and experimented with both n and n-1 in the denominator, and to my surprise the value of the semi standard deviation was higher than the value of the standard deviation. Under what circumstances the semi standard deviation exceeds the standard deviation? Do practitioners use the semi standard deviation in portfolio management?
I'm not even going to lmgtfy this.
well what a prick you are then!
Risk = the potential for you to lose money / principle, not volatility (in my mind)
Sint nemo aut rerum eum ex. Maiores dolores ut eos culpa non consequatur. Inventore atque tempora omnis quidem quis neque. Aliquid distinctio vel quidem architecto porro error. Facilis ipsam quia rem architecto rerum consequatur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...