Historical Volatility

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Benzinga  5 hrs ago  Comment 
As Democrat Hillary Clinton and Republican Donald Trump fight to become the next American President, investors need to protect their portfolios from wild swings that can come without warning as campaign rhetoric heats up, according to a recent...
Benzinga  May 27  Comment 
Palo Alto Networks Inc (NYSE: PANW) reported its 3QFY revenues above the estimate and consensus, with in-line EPS. Goldman Sachs’ Gabriela Borges maintains a Buy rating on the company, while lowering the price target from $188 to $165. 3Q...
Financial Times  May 27  Comment 
GDP revision shows that economy has withstood global volatility
newratings.com  May 27  Comment 
WASHINGTON (dpa-AFX) - Early indications suggest that Wall Street stocks may open Friday's session modestly lower as commodities turn southward. Among the global markets, Asian stocks ended mostly higher amid the release of negative inflation...
MarketWatch  May 27  Comment 
Volatility has taken hold of the financial markets, and it’s likely to bring out the worst in investors.
Benzinga  May 26  Comment 
Shares of Alibaba Group Holding Ltd (NYSE: BABA) have experienced plenty of volatility in 2016, but are ultimately down 3.85 percent year-to-date. Having said this, shares have been on the rise lately, recuperating more than 28 percent of their...
OilVoice  May 26  Comment 
Global oil traders are having lots of fun as oil market volatility ramps up. Earlier this month for example Reuters reported that Glencore have got big positions all over the place in North Sea oi
Wall Street Journal  May 26  Comment 
Orders for long-lasting goods improved in April due to a surge in the volatile civilian-aircraft category, but underlying data shows businesses remain hesitant to invest.




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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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