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Volatility

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Updated: Aug 20, 2021

Same as dispersion. In finance, volatility usually refers to the rate at which a financial variable, such as stock price, moves up or down over time. Volatility is measured by the standard deviation or, sometimes, by the variance. The (absolute) empirical volatility of a stock price is usually calculated as the annualized standard deviation of daily change in price. A measure of the volatility of a stock relative to the market is its beta coefficient.

Reference: Oxford Press Dictonary of Economics, 5th edt.


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James Knight
Editor of Education
James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.