Historical Volatility

RECENT NEWS
The Times of India  4 hrs ago  Comment 
Vedanta Ltd on Wednesday reported a 35.44 per cent fall in net profit to Rs 865.94 crore for the June quarter on a consolidated basis on account of volatile commodity prices among other factors.
Yahoo  6 hrs ago  Comment 
No matter how much it tries to avoid it, the Fed could get markets spinning on a fresh round of rate hike speculation Wednesday.
The Economic Times  6 hrs ago  Comment 
"We think that the Fed is likely to start hiking rates beginning September since the decision is likely to be very data-dependent."
The Economic Times  8 hrs ago  Comment 
Department of Disinvestment has told Finance Ministry it may be able to raise only about Rs 30,000 crore given the volatile market conditions.
Financial Times  8 hrs ago  Comment 
Blends of momentum, value and volatility stocks will not yet oust portfolios balanced by sector
newratings.com  10 hrs ago  Comment 
Baader Bank significantly improves operating performance despite volatile financial market conditions in the first half of 2015 DGAP-News: Baader Bank AG / Key word(s): Half Year Results Baader Bank significantly improves operating performance...
The Economic Times  11 hrs ago  Comment 
But after an exuberant, government-engineered 150 per cent rise over the 12 months to mid-June when the market peaked.
Financial Times  Jul 29  Comment 
Shanghai rallies after fresh volatility
Yahoo  Jul 28  Comment 
U.S. stocks zipped higher on Tuesday as China's volatile market stabilized and oil prices bounced back from near six-month lows.




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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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