Historical Volatility

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SeekingAlpha  3 hrs ago  Comment 
The Economic Times  6 hrs ago  Comment 
"The long end definitely makes sense. But the key point is that the short end is not as volatile now as it was, say, about six months ago. "
The Australian  9 hrs ago  Comment 
GAMING giant Echo says its international VIP arm is proving to be a goldmine, but it has warned of potential volatility.
The Australian  11 hrs ago  Comment 
TRAVEL group Flight Centre has warned it could struggle to reach its annual profit growth target, amid volatility in the Australian market.
WA Business News  Oct 29  Comment 
Unlike 2013 when reported sales increased steadily across October, activity in 2014 remains volatile with house sales up again this week by 11% to 619 but below the reported 635 a fortnight ago.
newratings.com  Oct 29  Comment 
WASHINGTON (dpa-AFX) - Stocks saw considerable volatility following the Federal Reserve's monetary policy meeting on Wednesday but maintained a negative bias before closing modestly lower. The losses on the day partly offset the rally seen in...
Forbes  Oct 29  Comment 
Hedge funds bullish on the margins, but only as a play off short-term volatility. Long money recommends going short the Market Vectors Russia ETF.
MarketWatch  Oct 29  Comment 
Despite the widely-telegraphed nature and gradual unwinding of the QE, some analysts are warning that ending billions of dollars worth of stimulus will also tap the brakes on the stock market’s recent rise




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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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