Volatility calculation
The volatility of a stock is a measurement of the change in variance in the returns of a stock over a specific period of time. It is common to compare the volatility of a stock with another stock to get a feel for which may have less risk or to a market index to examine the stock's volatility in the overall market. Generally, the higher the volatility, the riskier the investment in that stock, which results in investing in one over another.
Volatility is calculated by taking a rolling window standard deviation on the percentage change in a stock. The size of the window affects the overall result. The wider the window, the less representative the measurement will become. As the window narrows, the result approaches the standard ...
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