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#1
10-28-2003, 12:51 PM
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Easy Standard Deviation Question
What is the formula for indentifiing the probability of seeing a certain swing based on the Std Deviation.
Hmmm that doesn't make much sence, so lets put it this way. How to I calculate that 1SD is 68% likely or that 2SDs are 95% likely or 1.7SD are 90% or whatever. Lets say I experience a 2.4SD downswing, how can I calculate the liklyhood of that happening? 
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#2
10-28-2003, 03:21 PM
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Re: Easy Standard Deviation Question
Lets say I experience a 2.4SD downswing, how can I calculate the liklyhood of that happening?
I'm not sure exactly what you're asking, so I'll provide the answer to a couple different questions (with the assistance of Excel). 1) What is the probability of experiencing a 2.4 SD loss or worse? <font color="blue">=normsdist(-2.4)</font> 2) What is the probability of experiencing a 2.4 SD swing or worse (<=-2.4 SD or >=2.4 SD)? <font color="blue">=2*normsdist(-2.4)</font> 3) What is the probability of experiencing a swing of 2.4 SD of less (-2.4 SD to 2.4 SD)? <font color="blue">=1-2*normsdist(-2.4)</font> -- Homer
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