Downside Deviation

Learn more about Downside Deviation

Downside deviation is a statistical measure that evaluates the negative volatility of an investment's returns. It is used in the calculation of the Sortino ratio to evaluate the risk-adjusted performance of an investment.

Unlike standard deviation, which considers both positive and negative deviations of returns, downside deviation only considers negative returns. Therefore, it measures the volatility of potential losses of an investment.

More info : Investopedia

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