Ask someone to tell you how long their commute is, and they can probably provide an average number without much thought. But ...

In particular, the empirical rule predicts that in normal distributions, 68% of observations will fall within the first standard deviation (µ ± σ), 95% within the first two standard deviations ...

The sample formula is used when ... This is done by calculating the standard deviation of individual assets within your portfolio as well as the correlation of the securities you hold.