Historical Volatility

RECENT NEWS
The Hindu Business Line  10 hrs ago  Comment 
Palmolein rose by ₹1 while cotton refined oil dropped by ₹2 for 10 kg each. Other edible oils ruled steady on slack demand amid volatile futures. The volume in spot market remained thin. Higher ar...
newratings.com  12 hrs ago  Comment 
BEIJING (dpa-AFX) - Fitch Ratings maintained China's sovereign ratings and 'stable' outlook on Friday, citing strong external balance sheet and the less volatile economic growth. Fitch affirmed China's long-term foreign and...
Wall Street Journal  Apr 4  Comment 
Israeli digital-marketing company Matomy Media Group pulled its planned initial public offering on the main market of the London Stock Exchange after failing to meet U.K. listing requirements and because of volatility in the sector.
The Economic Times  Apr 4  Comment 
As domestic investors are concerned, it is coming in indirectly through the insurance sector, but DIIs and all the other people are facing redemptions.
Daily FX  Apr 4  Comment 
The US Dollar and Japanese Yen may be in for a volatile end of the trading week as a much-anticipated Nonfarm Payrolls figure drives Fed policy expectations.
Finance Asia  Apr 4  Comment 
Baioo Family Interactive priced near the bottom end of its indicative price range as volatile technology stocks flustered retail investors.     
Benzinga  Apr 3  Comment 
Shares of Micron Technology (NASDAQ: MU) are volatile in after-market trading after the company reported second quarter earnings. After closing at $24, shares hit a high of $25.15, then quickly fell below the day's closing price. Shares are...
Finance Asia  Apr 3  Comment 
Baioo Family Interactive priced near the bottom end of its indicative price range as volatile technology stocks flustered retail investors.     
The Hindu Business Line  Apr 3  Comment 
A contrasting trend was witnessed in palm oil and soya oil prices on Thursday. On the NCDEX, soya oil futures rose by ₹5-6 but on the spot, it ruled steady in absence of demand. On Bombay Commodit...




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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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