In a normal distribution, a z-score tells you how many standard deviations a point is from the mean, i.e., z =( x - mean)/ standard deviation
A statistic known as the standard deviation, which is derived as the square root of variance, gauges a data value's dispersion from its mean. The standard deviation is determined as the square root of the variance by calculating the departure of each data point from the mean.
If the data points are further from the mean, there is a bigger deviation within the data set; consequently, the more spread out the data, the higher the standard deviation.
ESSENTIAL LESSONS:
The dispersion of a dataset in relation to its mean is measured by the standard deviation.
The square root of the variance is used to compute it.
When assessing the relative riskiness of an asset, standard deviation is frequently employed in finance.
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