Finance
Turn monthly risk into yearly risk
=B1*SQRT(12)How it works in Excel
- B1 is the monthly standard deviation.
- SQRT(12) scales it to a year.
- For daily data, people commonly use SQRT(252).
- This assumes each month is independent of the last.
The idea in general
Risk grows with the square root of time, slower than returns do.
What I assumed
- The monthly standard deviation is in B1.
Check the result on your own data before relying on it.