What is Volatility?

It refers to the range and speed of price changes. Analysts will focus on the market, index and specific securities volatility. By focusing on volatility, you can try to evaluate. Risk.

Where have you heard of volatility?

The term gained traction during economic turmoil. Economic turmoil refers to uncertainty among investors spurring stock market volatility, stock prices change rapidly.

The information you need to know about volatility...

Securities have high volatility and their value can change significantly in a short period of time. Volatility is measured using the "standard deviation" tool that measures the deviation of an asset from the mean.

Certain assets are more volatile, so individual stocks are more volatile than stock market indices that contain many stocks. As a result, conservative investors may avoid securities with high volatility because of the uncertainty of their returns.

To understand volatility, investors can assess of securities beta coefficient. It measures the volatility of individual assets compared to the broader market, and the Capital Asset Pricing Model (CAPM) calculates their expected returns based on the asset's beta and expected market returns.

To help investors predict S & P 500 Index the volatility, chicago Board Options Exchange real-time release of the Volatility Index (VIX).