what is volatility ?
Definition
Volatility is a measure of how much the price of an asset has moved up or down over time. Generally, the more volatile an asset is, the riskier it’s considered to be as an investment — and the more potential it has to offer either higher returns or higher losses over shorter periods of time than comparatively less volatile assets.
How is volatility measured?
When people talk about measuring volatility, they’re usually referring to “historical volatility,” a number derived from a study of prices over a specific time period (often 30 days or a year).
Why is volatility important to understand?
Volatility is one of the primary factors that goes into assessing investment risk.