Also called Standard deviations, Sigma

Z-score

How many standard deviations today's price sits from its recent average. Two sigma below means a move this far down happened on roughly one day in forty.

Updated 2026-09-03

A z-score expresses how far a value sits from its own average, measured in standard deviations. A z-score of 2 means the price is two standard deviations above its recent mean. It is the same measurement Bollinger bands draw, expressed as a number instead of a line.

Its advantage is that it is comparable across instruments and across time. A $12 move above the average means nothing on its own; a z-score of 2.4 means the same thing on a penny stock and on an index, and it means the same thing in a calm month and a violent one.

It assumes the thing you are measuring has a stable mean to revert to. For a stock in a genuine uptrend, the mean is moving, and a persistently high z-score is describing the trend rather than an extreme. See mean reversion for why that distinction decides whether the measure is useful or actively harmful.

See also

  • Bollinger bands — A moving average with bands drawn two standard deviations above and below it. Price at a band is unusual relative to its own recent range, not relative to any other stock.
  • Mean reversion — The tendency of a stretched price to drift back toward its own average. Angie measures how often that actually happened for a name rather than assuming it will.

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Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.

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