Calculate the standard deviation of the historical returns compared to the mean determined in Step 3. In Excel, this can be achieved by using the STDEV function.

The following article will show you, step-by-step, how to calculate the historical variance of stock returns with a detailed example.

Understanding STDEV Add together all the cash flows you have put in the spreadsheet to calculate a total. Divide the total by the number of historical entries to calculate the mean average cash flow.

A stock's historical variance measures the difference between the stock's returns for different periods and its average return. A stock with a lower.