Normally we will consider 2 important areas when investing in a particular asset :The Risk & Returns of the asset.
When caculating returns,it will be much more straight forward.However when come to risk assumption between 2 different asset ,we have a method which require more work is by caculating the Standard Deviation of a particular asset
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The Standard deviation of a asset shows how risky the asset is in terms of price variations and by comparing the standard deviation of 2 different asset ,it will enable us as an investors to make informed decisions.
Here, i will compare 2 stocks;SPH & M1.
Using current price of SPH at $4.01 & M1 at $2.75 ,we will caculate the returns of these stocks in terms of dividend yield.
SPH :$0.24/$4.01 = 5.99% (SPH declared $0.24 dividend)
M1:$0.145/$2.75 = 5.27% (M1 declared $0.145 dividend)
Now,to caculate the Standard deviation of ......