Standard Deviation, Definition
Broadly speaking, Standard Deviation refers to a measure of the dispersion of a set of data from the average. The larger the difference between the closing prices and the average price, the higher the standard deviation, and the higher the volatility. The closer the closing prices are to the average price, the lower the standard deviation and volatility. In finance, standard deviation is applied to the annual rate of return of an investment to determine volatility, or risk.