Monthly Standard Deviation: Measures the degree of variation of a fund’s returns around the fund’s mean (average) return for a 1-month period. The higher the volatility of the returns, the higher the standard deviation. The standard deviation is used as a measure of investment risk.
Investors who are required to select and monitor investment managers should develop a basic understanding of investment statistics. Quantitative tools can provide you with good insight that you can use in your qualitative interviews with managers and when monitoring your investments.