Historical Volatility

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SeekingAlpha  4 hrs ago  Comment 
By Michael A. Gayed, CFA: "I don't want to be interesting. I want to be good." - Ludwig Mies van der Rohe I've finally gotten a chance to get back from weeks of traveling presenting our award winning papers on predicting corrections and...
Gold Stocks Today  Aug 16  Comment 
Courtesy of Doug Short: Today was a busy one for economic updates: the Producer Price Index, Industrial Production and Consumer Sentiment. But the market was primarily focused on the international scene — most notably the conflict in Ukraine....
TheStreet.com  Aug 16  Comment 
NEW YORK (TheStreet) -- U.S. equities sold off early on Friday, due to rumors over heightening geopolitical tensions. However, investors bought the dip and pushed the S&P 500 back to flat for the session.  On CNBC's "Fast Money" TV show, Tim...
Market Intelligence Center  Aug 15  Comment 
It was a busy week at MarketIntelligenceCenter.com. Tensions between Russia and Ukraine contributed too much of the week's volatility. We also saw some pretty unimpressive earnings reports from major retailers, compared the companies that make...
TheStreet.com  Aug 15  Comment 
NEW YORK (TheStreet) -- With the help of military action in Ukraine and Russia plus the triple witching options expiration, the stock indexes were whipsawed on Friday on huge volume. In what appeared to be a huge move to the upside early on, the...
New York Times  Aug 15  Comment 
As the Fed feels its way, a former member of the Fed board said that investors may have to prepare for greater volatility.
TheStreet.com  Aug 15  Comment 
LONDON (The Deal) -- European and Asian markets seemed intent on ignoring geopolitics this morning and focused instead on interest rates. The assumption is that weak economies and signs of incipient inflation will force central banks to continue...
SeekingAlpha  Aug 15  Comment 
By Gary Bourgeault: With the big year at the box office Twenty-First Century Fox (NASDAQ:FOXA) has had, you would think it would have been rewarded better, but the company has been taking a hit from weakness in its usually strong TV lineup. The...
Financial Times  Aug 15  Comment 
US benchmark stock indices responded to the jump in volatility by reversing earlier gains
SeekingAlpha  Aug 14  Comment 
By David Fabian: Sell-offs in the market generally create fear and overreaction as investors digest the news and reposition their assets to weather the storm. Despite the good intentions of buying low and selling high, the tendency for traders is...




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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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