Historical Volatility

Financial Times  2 hrs ago  Comment 
London-based fund manager Ruffer says assets are riskier than they look
MarketWatch  4 hrs ago  Comment 
Long-time bear John Hussman says the wild swings like we’re seeing on the Dow and the S&P 500 only serve to reinforce his pessimistic view for a decade or more of zero to negative returns.
MarketWatch  5 hrs ago  Comment 
Volatility has been extremely, well, volatile this year.
The Economist  9 hrs ago  Comment 
JEREMY Grantham is an investor with 50 years of experience in the markets who is known for his caution about the outlook for long-term returns (he works for the GMO fund management group). But he caused a stir earlier this year when he said the...
The Economic Times  Apr 10  Comment 
The upcoming state elections are expected to add to the volatility in the market.
Motley Fool  Apr 9  Comment 
Snapchat's parent company stumbles after another round of layoffs and a BlackBerry patent infringement suit.
MarketWatch  Apr 9  Comment 
U.S. stock-market investors have been looking forward to the first-quarter earnings season, hoping it will provide something of a reprieve from recent trading activity, which has been heavily volatile and driven by uncertainty over global trade...


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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