Historical Volatility

Benzinga  5 hrs ago  Comment 
Battery on the Go Inc., the Miami-based maker of the popular PowerBar® portable battery charger, filed a suit against Walt Disney Co. today in federal court seeking $50 million in damages for illegally using its product name on inferior battery...
Yahoo  7 hrs ago  Comment 
When the Federal Reserve raises U.S. interest rates for the first time in nearly a decade, it should weigh the effects on global economies and can expect some bouts of financial market volatility, a top Fed official said on Tuesday. "In the...
Market Intelligence Center  10 hrs ago  Comment 
Rising rate concerns have been playing foul on rate-sensitive sectors since the start of this year. Rates have been extremely volatile with many ups and downs. Yields on the 10-year Treasury bonds are currently hovering around 2.2%, up from 1.89%...
Benzinga  11 hrs ago  Comment 
Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show. S&P 500 index futures are trading lower by 21.25 points at 2103.25 in Tuesday's session. The index has finally broken out of the near-22 point trading...
Forbes  11 hrs ago  Comment 
It was more whimper than roar, but the S&P 500 (SPX) ground to another record high last week. This achievement was scored within whisker-thin trading ranges as select measures of broader-market volatility probed 2015 lows. Now, economic data comes...
Clusterstock  May 26  Comment 
Business spending in April was stronger than what economists had forecast. According to the Census, nondefense capital goods orders excluding aircraft jumped by 1.0%. Economists had expected this metric — informally known as core capex — to...
Financial Times  May 26  Comment 
Vanguard and BlackRock among largest shareholders in volatile HK groups


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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