Historical Volatility

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MarketWatch  5 hrs ago  Comment 
New home building sprang higher last month, but the lopsided gains were led by volatile apartment building, and the U.S. housing market still has much room for improvement.
New York Times  7 hrs ago  Comment 
The huge field of Republican candidates has created dizzying volatility in the race, making it harder for the eventual nominee to corral wide support.
The Economic Times  Jul 17  Comment 
If we come across some ugly numbers, we may probably start seeing profit booking or some sort of kind of cautious mood, says Diwan.
The Economic Times  Jul 17  Comment 
"Portfolio flows change hands very frequently, even from minute to minute. This is one of the reasons why banking is always considered differently."
TechCrunch  Jul 16  Comment 
 And lo, volatility returned to the crypto-markets. It’s been a fun week in the bitcoin markets, having seen the price of the stuff break the emotionally important $300 mark, only to fall back underneath it. The mini rally was perhaps inspired...
Wall Street Journal  Jul 16  Comment 
Second-quarter results for Goldman Sachs provide an unwelcome reminder of how volatile its trading business can be.
Financial Times  Jul 16  Comment 
German property lender goes ahead with €1bn listing despite recent volatility




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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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