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Historical Volatility

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Volatility subsides as talk of Fed taper takes the backseat to weak
FX Street  2 hrs ago  Comment 
Asian Market Update: Volatility subsides as talk of Fed taper takes the backseat to weak US... For more information, read our latest forex news and reports.
Pre-market: Nifty seen opening soft; RBI policy eyed
The Economic Times  6 hrs ago  Comment 
The Nifty index is expected to open soft and the index is likely to remain volatile ahead of the RBI's policy meet later today.
[$] Euro Becomes the Port in a Storm
Wall Street Journal  8 hrs ago  Comment 
Abreast of the Market: Assets from Japanese stocks to U.S. Treasurys have slumped this spring. But the euro has largely avoided the volatile trading that has whipsawed other currencies.
What the Heck is Volatility and Why Should I Care?
FX Street  10 hrs ago  Comment 
Volatility has been the talk of the town these days, as traders are starting to observe notable... For more information, read our latest forex news and reports.
Brace for volatility till general election
The Hindu Business Line  Jun 16  Comment 
While political analysts are busy in analysing publicly the fall out of Janata Dal-United parting ways with National Democratic Alliance, marketmen are quietly working out on strategies to be adop...
Markets likely to be volatile this week
The Hindu Business Line  Jun 16  Comment 
With mixed signals on the economic front, the stock market is likely to see volatility this week as investors track RBI’s policy as well as the US Government’s monetary easing steps, according to...
Market Snapshot: Stock volatility only owes so much to Fed
MarketWatch  Jun 16  Comment 
Investing the quant way
The Hindu Business Line  Jun 15  Comment 
Quantitative investing, simply called quant, is a style which follows a set of rules to evaluate and capture growth, sentiment, price trends, valuation and volatility in the markets. ...
Who Got Rich This Week: Midwestern Kefir Kings, Magazine Magnates And More
Forbes  Jun 15  Comment 
Each week at Forbes we scan our database of corporate insiders to see who got richer from the action in the stock market. Equity markets were quite volatile this week, much as they have been since the major American indices crested back on May...
Top ten stocks to buy in volatile markets
The Economic Times  Jun 15  Comment 
The markets got support from strong global cues. However, further weakness in currency and a no rate cut by RBI may play spoil sport for markets.
Wall St Week Ahead: Investors will look to Fed to ease volatility
Reuters  Jun 15  Comment 
Stock investors eager to hear from the Federal Reserve about its plans for continuing economic stimulus may get some soothing words from the U.S. central bank next week.




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Waseem Alim

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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