Historical Volatility

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SeekingAlpha  2 hrs ago  Comment 
By Kevin Wrotenbery: Defining risk is hard, and not that useful. Most investors already have some intuition about what constitutes risk, and it's not an easy area in which to change people's minds. If we adopt Warren Buffett's model where every...
SeekingAlpha  Aug 29  Comment 
By Kurtis Hemmerling: Low Volatility and Dividend Growth is a Winning Combo Dividend Growth Investing is a popular topic in the Seeking Alpha community and for many good reasons. Confidence. A company that can afford to consistently pay...
New York Times  Aug 29  Comment 
President Obama confronted two volatile crises with restraint Thursday, saying he was not close to authorizing airstrikes in Syria and playing down an escalation of Russia’s intervention in Ukraine.
New York Times  Aug 28  Comment 
President Obama confronted two volatile crises with restraint Thursday, saying he was not close to authorizing airstrikes in Syria and playing down an escalation of Russia’s intervention in Ukraine.
New York Times  Aug 28  Comment 
President Obama confronted two volatile crises with restraint Thursday, saying he was not close to authorizing airstrikes in Syria and playing down an escalation of Russia’s intervention in Ukraine.
The Economic Times  Aug 28  Comment 
US stocks opened lower after Ukraine Prez said Russian forces had been brought into his country, bringing the volatile region into focus
The Economic Times  Aug 28  Comment 
Key risk events include the Supreme Court ruling on coal blocks (September 1) and US employment data (September 5), say traders.
The Hindu Business Line  Aug 28  Comment 
Nifty August Futures (7,957) The Nifty futures contract could witness volatile movement due to F&O expiry today. It is currently up 26 points. The contract opened with an...
WA Business News  Aug 28  Comment 
Window coverings manufacturer and retailer Kresta Holdings has reported a $1.4 million loss for the year ended June 30, down from $1.5 million net profit last year.
Yahoo  Aug 28  Comment 
By Gertrude Chavez-Dreyfuss and Michael Connor NEW YORK (Reuters) - Bitcoin is catching on at U.S. "Retail payments aren't broken." There are also worries about bitcoin's volatility: its price in U.S.




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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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