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Historical volatility

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Bank of England, still divided, flags market impact of Fed uncertainty
Reuters  4 hrs ago  Comment 
Bank of England policymakers acknowledged earlier this month that further market volatility could be on the way because of uncertainty about the direction of U.S. monetary policy, but came no closer to shifting their own stance.
Volatility plagues Indian indices
Equitymaster  5 hrs ago  Comment 
Posted by Equitymaster        Indian equity markets had a rather volatile trading session today. The indices began the day's proceedings on a weak note and languished in the red for most part of the trading session. The afternoon...
ANALYST: The Next Leg Of Volatility Will Start In The Days Ahead
Clusterstock  7 hrs ago  Comment 
It's been an interesting couple of months in world markets. In a sense, we've seen a level of volatility and confusion that we haven't seen in awhile. This is especially apparent in any emerging markets (and of course Japan). And yet US...
High level of Rupee volatility not desirable
The Economic Times  Jun 19  Comment 
" Highly depreciating rupee is not good from two different points. First of all, it just gives you a sense of false confidence. The second thing is it is not good for the Indian economy."
As Investors Pour Money Into Stocks, Volatility Drops
Forbes  Jun 18  Comment 
The start of 2013 was welcomed by the fiscal cliff drama turning out to be just that: drama. Stocks reacted well, as the S&P 500 jumped 5% in January. As a result, investors started pouring money into equities, but not for all of the right reasons.
Rebalance of Russell index to bring volume surge at quarter-end
Reuters  Jun 18  Comment 
Investors accustomed to late market volatility at the end of the quarter should expect an extra jolt on June 28, when billions of dollars in stock trades will be executed in less than two seconds.
Home building continues to rise
CNNMoney.com  Jun 18  Comment 
The pace of home building gained steam in May, another sign of the housing market's recovery.
State of the market: Federal Reserve rumors driving volatility
Market Intelligence Center  Jun 18  Comment 
For the fifth day in a row (and the eleventh out of the last twelve), the DJIA experienced intraday volatility exceeding 100 points yesterday. While volatility in and of itself isn't a big deal these days, we do have to recognize that this...
Russia starts delivering $1 bln arms package to Azerbaijan
Reuters  Jun 18  Comment 
Russia has begun delivering tanks, artillery cannons and rocket launchers worth $1 billion to Azerbaijan, a Moscow-based defence group said on Tuesday, as the former Soviet republic strengthens its military readiness in the volatile South...
Liquidity Detox: Prepare for the Shakes
Forbes  Jun 18  Comment 
Volatility is back, and unpacking for a long stay.  June will set a 2013 record for days with 100-point swings, and the Vix is headed north.  But the real story is in bonds, where total returns for the year -- interest income plus or minus price...




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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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