# Downside deviation

have any practitioners here worked with the downside deviation metric? I've looked a little into its concepts but wish to know its utility in practice (if any). Does it bring any value to risk measurement or allocation strategies?

• I'm sure many have worked with it. It's utility depends on what you need to do. Yes, it can help with risk management. Jan 27 '14 at 16:15

• they might use it instead of usual $\sigma$ in $R-\sigma$ space. I'm referring to Markowitz, H.M. (1959). Portfolio Selection: Efficient Diversification of Investments. New York: John Wiley & Sons. (reprinted by Yale University Press, 1970, ISBN 978-0-300-01372-6; 2nd ed. Basil Blackwell, 1991, ISBN 978-1-55786-108-5) Jan 28 '14 at 16:13