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Historical Volatility

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'Sell in May and go away' holds true for Sensex
The Economic Times  1 hr ago  Comment 
This strategy advises selling stocks in May, and then again entering around Halloween (beginning November), avoiding historical volatility during the period.
RBA rate decision - cut or longer pause?
FX Street  1 hr ago  Comment 
The Aussie is poised to display wild volatile moves later on the Asian session - 4.30GMT - as the... For more information, read our latest forex news and reports.
UPDATE: Deutsche Bank Upgrades YY to Buy on Solid Execution, Growing Platform Value
Benzinga  9 hrs ago  Comment 
In a report published Monday, Deutsche Bank analyst Alan Hellawell III upgraded the rating on YY (NASDAQ: YY) from Hold to Buy, and raised the price target from $15.20 to $25.10. In the report, Hellawell noted, “YY's better-than-expected rev...
A fresh look at annuities
CNNMoney.com  11 hrs ago  Comment 
Read full story for latest details.
Poultry feed prices seen flat in near-term
The Hindu Business Line  May 4  Comment 
Feed prices are likely to rule flat in near term following volatility in prices of key ingredients.Heavy fluctuation in prices of its input materials kept poultry feed prices unaltered this...
Pivotals: Reliance Industries (Rs 801.2)
The Hindu Business Line  May 4  Comment 
Reliance Industries has been moving sideways for more than a month in the band between Rs 760 and Rs 820. Last week too, the stock was volatile. It is currently testing its 200-day moving...
Rubber prices seen volatile next week
Business Times - Malaysia  May 4  Comment 
The Malaysian rubber prices are expected to be volatile next week amid weak economic data from China and the US, a dealer said. The negative external sentiment in China and the US would keep the traders away, he added. "The supply and demand...
Harmony Gold to cut costs, capex amid gold price volatility
Gold Stocks Today  May 3  Comment 
South African gold producer Harmony Gold plans to cut its service and corporate costs in South Africa by R400-million and its overall capital expenditure in South Africa and Papua New Guinea by R1.4-billion in the 2014 financial year, Harmony Gold...




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This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition.
 
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Waseem Alim

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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