VANGUARD(66)FTSE(19)FUNDS(31)ETF(80)Stock(8537)
In the dynamic world of investing, understanding the volatility and risk associated with stocks is crucial. One tool that investors use to gauge this is the standard deviation. In this article, we delve into the Vanguard Funds FTSE ETF stock and its standard deviation, helping investors make informed decisions.
What is Standard Deviation?
Standard deviation is a statistical measure that quantifies the amount of variation or dispersion in a set of values. In the context of stocks, it measures how much the price of a stock fluctuates over time. A higher standard deviation indicates higher volatility, which means the stock price can move more significantly up or down.
Vanguard Funds FTSE ETF Stock
The Vanguard FTSE All-World ex-US ETF (VXUS) is an exchange-traded fund that tracks the FTSE All-World ex-US Index. This index includes companies from developed and emerging markets outside the United States. The ETF provides investors with a diversified portfolio of international stocks, offering exposure to various sectors and geographies.
Standard Deviation of Vanguard Funds FTSE ETF Stock
The standard deviation of the Vanguard Funds FTSE ETF stock can provide valuable insights into its volatility. According to historical data, the standard deviation of VXUS is around 11.5%. This means that over a given period, the stock price can deviate from its average by approximately 11.5%.
Understanding Volatility and Risk
A higher standard deviation suggests higher risk. This is because a stock with a high standard deviation is more likely to experience significant price swings. However, it's important to note that higher volatility can also present opportunities for higher returns.
Case Study: Apple Inc. (AAPL) vs. Vanguard Funds FTSE ETF Stock
To illustrate the difference in volatility, let's compare the standard deviation of Apple Inc. (AAPL) with that of the Vanguard Funds FTSE ETF stock. According to historical data, the standard deviation of AAPL is around 13.5%. This indicates that Apple's stock price is more volatile than that of the Vanguard Funds FTSE ETF stock.
While Apple's stock may offer higher returns during bull markets, it also carries higher risk. In contrast, the Vanguard Funds FTSE ETF stock provides a more balanced approach, offering diversification and potentially lower volatility.
Conclusion
Understanding the standard deviation of a stock, such as the Vanguard Funds FTSE ETF stock, is essential for investors looking to assess risk and volatility. While a higher standard deviation indicates higher risk, it also presents opportunities for higher returns. By analyzing historical data and considering the specific context of the stock, investors can make informed decisions and construct a well-diversified portfolio.
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