STANDARD DEVIATION

The risk or stock portfolio is usually measured using the standard deviation by the investors. In
this paper, standard deviation is the measure of volatility measuring how widely prices are
dispersed from the average price . The basic idea is the stock is more volatile as more stocks’ returns
vary from the average return. And to compute the standard deviation of each stocks, see below.

Where:
SD – standard deviation
ri – prices
ravg – mean of standard deviation
n – number of months

CONCLUSION (related to standard deviation only)

Standard deviation is a useful tool at an investing or even trading strategies as it helps to secure volatility
and even predict or forecast trend at the future. A high standard deviation indicates a volatile stock while
a low standard deviation will return a low value, which also means a low volatility measurement. In this
paper, all the three stocks will be considered as market tops.
BDO Unibank standard deviation shows that the stock is low volatile until 2017, which its standard
deviation starts to decrease at year 2018.
The standard deviation of San Miguel Corporation below shows that at the start of 2015 up to 2017, it has
a decreasing volatility. And at 2018, it boomed from the standard deviation of 4.70 to 14.70 then went
down the year after.
Also, it is shown below the Bank of the Philippine Island’s standard deviation. Compared to the other two
stocks, BPI shows a higher to BDO but lower from SMC’ standard deviations at the beginning of 2015
then continue to decrease up until the year 2018, which rises from 5.03 to 11.48.
The standard deviation accompanied by increased volatility for a short period of time, such as BDO at the
year 2017, SMC at year 2018 and BPI also at the year 2018, indicates that the investors are undeceives
and nervous. And the stock with decreasing volatility over long period of time specifies maturing bull or
trend market.