Historical Volatility

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TheStreet.com  2 hrs ago  Comment 
NEW YORK (TheStreet) -- There's a theory on Wall Street that how equities perform in January is a portent for the rest of the year. If a trader were to take this at face value, 2015 would shape up to be an ugly one for stocks. Another big slide...
MarketWatch  3 hrs ago  Comment 
Several factors are contributing to increased volatility in U.S. stocks and that’s setting the stage for what might be the first market correction in years, according to strategists at Charles Schwab.
Benzinga  3 hrs ago  Comment 
Motif Investing looks for “trends, ideas and world events that could create an investment opportunity.” It then finds related stocks and builds portfolios, which weigh the stocks (20 to 30) based on their exposure to a particular...
MarketWatch  5 hrs ago  Comment 
An alternative measure of GDP that strips out volatile inventory, trade and government spending show.
Forbes  7 hrs ago  Comment 
In late morning trading on Thursday, the bears were out in force as I received an urgent email to sign up for a “Crash Alert” by the end of the day. The major averages once again held the key monthly support as they had earlier in the month....
Clusterstock  9 hrs ago  Comment 
Consumer confidence in the US continues to be very high. The University of Michigan's final index of consumer sentiment in January was 98.1, up from 93.6 in December but down slightly from the 98.2 preliminary estimate earlier this...
Financial Times  12 hrs ago  Comment 
Central bank acts despite rouble volatility and inflation
The Economic Times  Jan 30  Comment 
There are negative surprises and we have seen that during this period the market has been touching all-time highs every week.
OilVoice  Jan 30  Comment 
The press suggests that oil companies are cancelling field development projects in the current low price environment. This made me question these decisions since oil companies should be longterm thin
The Economic Times  Jan 30  Comment 
The volatility will increase in the markets going forward and investors should use dips to accumulate quality stocks at lower levels.




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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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