Annualized Standard Deviation Calculation | Formula

Annualized Standard Deviation Formula

Annualized Standard Deviation Calculation Formula

Standard deviation that has been calculated from periodic returns and then annualized. Annualized standard deviation or risk is based on a minimum of 12 observations (for example, 12 months or 12 quarters).

In Russell Performance Universes (RPU), annualized standard deviation is calculated as follows:

Where	Equals
a	Annualized risk
n	Number of observations
Ri	i-th return
P	Periodicity (number of time periods)

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