Historical Volatility

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Yahoo  Jan 9  Comment 
U.S. Securities and Exchange Commission economists have begun scrutinizing riskier types of exchange-traded funds as part of an effort to determine whether they may inflame already rocky market conditions. ...
guardian.co.uk  Jan 9  Comment 
From mindfulness to car pooling, here’s how to build the strength your business needs to thrive in a volatile world Resilience is the capacity for adapting to – and surviving – radically changing circumstances. This includes anything from...
The Economic Times  Jan 9  Comment 
The long-term outlook for the Indian equities remains positive due to strong fundamentals, though markets may face some volatility in the short term, say experts.
Jutia Group  Jan 9  Comment 
2014 Action to Affect Stock Market Forecast in 2015 Despite the hurdles and uncertainties along the way, 2014 turned out pretty good for the stock market. By the year’s end, the S&P 500 had broken 2,000, while the Dow took out 18,000. Technology...
The Australian  Jan 9  Comment 
GOLD producers are set for a brighter 2015 after a year of cost-cutting and volatile prices, with analysts tipping a price rally.
The Economic Times  Jan 9  Comment 
Volatility could also be called the old normal, given how common it was before the relatively tranquil years after the financial crisis.
The Hindu Business Line  Jan 9  Comment 
Chinese stocks ended lower after hitting their highest level in over five years on Friday, in one of their most volatile trading sessions since the global financial crisis. Key indices br...
Bloomberg  Jan 9  Comment 
China Stock Rally Fades in Last Hour as Volatility Jumps The Shanghai Composite Index fell, erasing a gain of as much as 3.4 percent in the last half hour of trading, as...




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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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