Historical Volatility

Yahoo  15 min ago  Comment 
U.S. stock investors have been enjoying an extended period of low volatility and steady gains, but with the Federal Reserve on track to raise interest rates this year and major indexes near records, the market could get a bit choppier in coming...
MarketWatch  8 hrs ago  Comment 
U.S. stock prices continue to climb the wall of worry over the past week, trading in narrow ranges amid low volatility and lower-than-usual volumes
The Economic Times  10 hrs ago  Comment 
Rajan said country has built up layers of defences against volatile capital flows in financial markets by building up its foreign exchange reserves.
Equitymaster  May 22  Comment 
Posted by Equitymaster        Indian equity markets opened the trading session on a strong note following global cues. The markets lost momentum in the afternoon session, but regained the thrust in the final hour. While the BSE-Sensex...
Finance Asia  May 22  Comment 
The Southeast Asian nation prices the largest single-tranche Islamic bond ever despite volatile market conditions.
The Economic Times  May 22  Comment 
'In the absence of a firm view around the Fed movement, uncertainty will continue and that will continue to reflect in volatile episodic moves in the bond markets.'
The Economic Times  May 22  Comment 
'Emerging markets may be stumbling into a bit more volatility because of all the yields going higher and also with the dollar moves coming in quite abruptly.'
Financial Times  May 22  Comment 
Head of SFC says market volatility does not imply misconduct
Reuters  May 21  Comment 
Sharp share price swings are testing the ability of Hong Kong's securities regulator to prevent potential market abuse and contain a surge in volatility brought about by a landmark trading link with Shanghai.


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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