This is the average of the two stocks' standard deviations. It is not the standard deviation of the portfolio.
This is the weighted average of the standard deviations of the two stocks in the portfolio. The weighted average of the standard deviations of the stocks in the portfolio is not the standard deviation of the portfolio. The weighted average does not account for the correlation between the two securities.
This is the variance of the portfolio; it is not the standard deviation of the portfolio. The standard deviation is the square root of the variance.
The formula for calculating the standard deviation of a two-stock portfolio is:
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