Standard Deviation

Standard deviation is a statistical term that gives you a good indication of volatility. It is a measurement of how widely values are dispersed from the average. Dispersion is the difference between the actual value (closing price) and the average value (mean closing price). The larger the gap between the closing prices and the average price, the higher the standard deviation will be which means the higher the volatility. The closer the closing prices are to the average price, the lower the standard deviation and the lower the volatility.