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Historical Volatility

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Will elections impact economic growth?
Equitymaster  3 hrs ago  Comment 
Posted by Equitymaster        These are the times of extreme volatility and irrationality. The domestic growth rate is close to decade lows. There seems hardly any respite in the near term. However, the markets are singing a different...
Retail Investors Buy Tesla's Volatility, Choose Twitter More Often Than Facebook
Forbes  11 hrs ago  Comment 
TD Ameritrade Holding's monthly look at its retail clients' trading activity shows real world investors were bullish in November as equities again hit record highs. Unlike in October, November trading was broad based, suggesting overall confidence...
Welcome move
The Hindu Business Line  Dec 9  Comment 
Investors can now protect themselves against interest rate and currency volatility, thus giving them fewer reasons to rush to the exit door in volatile times.
Roy Hill project covered against cyclones
WA Business News  Dec 9  Comment 
The developer of the $10 billion Roy Hill iron ore project has secured a unique insurance scheme which safeguards the project against construction delays and wage blowouts caused by cyclones on the volatile Pilbara coastline.
Six tips for investors before election results in May 2014
The Economic Times  Dec 9  Comment 
The recent surge in liquidity makes it imperative for investors to re-evaluate their holdings, while staying away from rumours and learning to cope with the volatility.
Are Low Volatility ETFs Safer In A Rising Rate Environment?
SeekingAlpha  Dec 6  Comment 
By Gary Gordon: Headline unemployment has fallen to a 5-year low of 7%. The perception that job growth is strengthening may pressure the Federal Reserve to curb its program of electronically printing money ($85 billion per month) and,...
The Long And Short Of It
SeekingAlpha  Dec 6  Comment 
By Financial Sense: By Ryan Puplava Stocks continue to run in place this week. Short-term, investors are searching for the next catalyst to move the market. Washington and the Taper continue to be the most widely used headline to explain the...
Another Step Forward For US DC Plans: Managing Volatility
SeekingAlpha  Dec 6  Comment 
By AllianceBernstein: By Daniel J. Loewy We’re seeing more US defined contribution (DC) plan sponsors looking at a variety of ways to help their participants manage volatility—and the accompanying anxiety and doubts that can often push...
My daughter has just had a baby and is angry and abusive towards me
Times Online  Dec 6  Comment 
Q: My relationship with my daughter is complex. She has always had a volatile personality and has felt a little...




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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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