Historical Volatility

RECENT NEWS
The Economic Times  2 hrs ago  Comment 
Last week's high of 8,250.80 would be a daunting task to overcome, though there is a possibility of extending the bounce back to 8,320­-8,380 level.
Benzinga  9 hrs ago  Comment 
An increasingly popular niche within the expansive universe of smart beta exchange-traded funds is the low volatility/high dividend concept. SPHD And 2 New ETFs The PowerShares S&P 500 High Dividend Low Volatility Portfolio (PowerShares...
The Economic Times  Dec 4  Comment 
Crude oil prices, disruptions in Parliament, a downward revision of India’s GDP and poor auto sales numbers dented investor sentiment all through the week.
MarketWatch  Dec 2  Comment 
While stocks have largely rallied since the election, the president-elect is still viewed as a wild card who could exacerbate volatility in 2017 and beyond.
Motley Fool  Dec 2  Comment 
Some of the market's best stocks could be flying under the radar of Wall Street and investors.
The Economic Times  Dec 2  Comment 
Both increased activity and increased volatility generally leads to higher volumes and that is the sort of tailwind that we are seeing in the last couple of weeks for us.
Equitymaster  Dec 2  Comment 
Posted by Equitymaster        Mr Market seem to be nervous these days. It's the demonetisation drive that has made it so. Benchmark indices have corrected sharply over the past 22 days - the time from when we're into the government's...
Motley Fool  Dec 1  Comment 
The fast-growing storage company put up some impressive numbers, but the stock sold off anyways.




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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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