Historical Volatility

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The Hindu Business Line  4 hrs ago  Comment 
Better prospects in Brazil and volatile global market don’t augur well for exporters
The Australian  6 hrs ago  Comment 
GLOBAL markets remained stuck in a volatility trap yesterday after a wild 48 hours marked by heavy losses from China to Europe.
Yahoo  7 hrs ago  Comment 
U.S. stocks were lower shortly after the opening bell on Wednesday, weighed down by a sharp decline in the energy sector as oil prices slumped.
Financial Times  10 hrs ago  Comment 
Mainland Chinese index’s volatile run continues
The Hindu Business Line  11 hrs ago  Comment 
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Bloomberg  Dec 10  Comment 
Yen Heads for Biggest 3-Day Gain in a Year; Aussie Snaps Skid The yen strengthened, heading for its biggest three-day gain versus the dollar in more than a year, as a decline...
Bloomberg  Dec 10  Comment 
Chinese Stocks Rise in Volatile Trading as Yuan Gains With Bonds Chinese stocks rose, with a gauge of volatility jumping to the highest level in five years, as slowing...
Financial Times  Dec 10  Comment 
Shanghai Composite still volatile after Tuesday’s 5.4% fall




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Volatility refers to the tendency of prices to change unexpectedly, usually as a response to new information or changes in demand for the investment. Volatility can be defined as an investment's tendency to move up and down in price over the latest n periods.

A security with high volatility has bigger fluctuations in price compared to a security with low volatility. The more quickly a price changes up and down, the more volatile it is. As such, volatility is often used as a measure of risk.

For example: A stock whose price went up 10% yesterday and went down 25% today is more volatile than a stock which increased 2% in both days.

Historical volatility is calculated by looking at past changes in stock price. The standard deviation of percentage changes in price is used to calculate observed volatility within the considered timeframe.

Historical Volatility, which looks at the past, is distinct from Implied volatility, which represents expectations about future fluctuations in price and is calculated by looking at the prices of options on the underlying investment.

Volatility is also different from Beta, which is a measure of how the stock price reacts to changes in a broad market index, such as the S&P 500.


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