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QuestionsCategory: Valuation QuadrantStandard Deviation from the mean P/E, P/B etc
Theodore Tan asked 1 year ago

Hi Victor,
Standard deviation was discussed when the graph of P/E is mentioned.
May I know how do I calculate one std deviation below and above the average P/E?
Thanks!

1 Answers
Victor Chng answered 1 year ago

Hi Theodore,
 
You can follow this video to calculate std deviation.
 
https://www.youtube.com/watch?v=k17_euuiTKw&t=551s

Erastus Jonker replied 4 months ago

Must we take standard deviation population or standard deviation sample?

Victor Chng replied 4 months ago

Hi Eratus Jonker,

use this formula: =STDEV.P

Adeline Ling replied 2 months ago

Hi Victor,

I’ve used the formula to find the std deviation but may I find out how to get the value for 1 std deviation below the average p/e and the value for 1 std deviation above the average p/e? Thank yoh.

Jieren Zheng replied 2 months ago

You can use the standard deviation value to subtract from the average PE to get 1 standard deviation below the average P/E, and add the standard deviation value to the average PE to get 1 standard deviation above the average P/E.

Victor Chng replied 2 months ago

Hi Adeline,

The steps is as JR had explained. I had also added a sample PE valuation excel under the excel tab.

https://investmentquadrant.com/financial-analysis-excel/

Victor Chng replied 2 months ago

Thanks JR

Jieren Zheng replied 2 months ago

welcome!

Adeline Ling replied 2 months ago

Thank you All.

Victor Chng replied 2 months ago

Welcome Adeline :)