Financial Quotient

What is volatility?

The term "volatility" is used to describe the degree of risk related to the size of changes in a security's value, and is a statistical measure of the dispersion of returns for a given security or market index.

It is commonly measured by using the standard deviation between returns from that same security or market index.

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A version of this article appeared in the print edition of The Sunday Times on December 16, 2018, with the headline 'What is volatility?'. Print Edition | Subscribe