Volatility is a general term referring to the variability or dispersion of a measured variable like return. While there are many volatility measures, many associate the term first with standard deviation. Other measures include: beta, value at risk and semi-deviation. In Finance, all other things equal, lower volatility is preferred over higher volatility.
Synonyms: variability, dispersion, standard deviation
Click box for answer.
True. This means that volatility tends to cluster.
Jim: We should always clarify which measure
we're using when we use the term
Kay: Agreed. In the trading world, the term normally refers to options volatility.
Many terms have 4-5 minute videos showing a derivation and explanation. If this term had one, it would appear here.
Videos can also be accessed from the YouTube Channel.
If this term had a video, the script would be here.
Our trained humans found other terms in the category investing concepts you may find helpful.
For links to all glossary terms and videos click the Outline button below.
Join the conversation at the FactorPad YouTube Channel. Subscribe here.
Next we cover the essential statistical topic of z-score . Click Next.