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In finance, volatility (usually denoted by "σ") is the degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns. Historic volatility measures a time series of past market prices.
For example, if you own only three stocks, your portfolio is going to be much more volatile than if you own 10 stocks or 30 stocks, especially if these larger portfolios own stocks across many ...
The VIX traces its origin to the financial economics research of Menachem Brenner and Dan Galai. In a series of papers beginning in 1989, Brenner and Galai proposed the creation of a series of volatility indices, beginning with an index on stock market volatility, and moving to interest rate and foreign exchange rate volatility. [1] [2]
Volatility risk is the risk of an adverse change of price, due to changes in the volatility of a factor affecting that price.It usually applies to derivative instruments, and their portfolios, where the volatility of the underlying asset is a major influencer of option prices.
Implied volatility is a powerful but often misunderstood metric that plays a major role in options trading.Implied volatility doesn’t tell you what’s going to happen to an option’s price ...
Long-term investors like companies with strong fundamentals. In the words of investing guru Warren Buffett, you want to find "a wonderful company at a fair price," then hold on for the long term ...
Low-volatility investing is an investment style that buys stocks or securities with low volatility and avoids those with high volatility. This investment style exploits the low-volatility anomaly. According to financial theory risk and return should be positively related, however in practice this is not true. Low-volatility investors aim to ...
With market volatility running high, even seasoned investors may feel the need to reduce their equity exposure in favor of less-risky investments. Some may have already moved their assets into ...