Stock Market Intermediate

Volatility

💡 In plain English: How much a stock's price swings up and down — high volatility = bigger swings, higher risk.

Definition

A statistical measure of the dispersion of returns for a given security, typically measured by standard deviation.

📌 Real-World Example

Bitcoin has 60%+ annual volatility — it can drop 20% in a week. Nifty 50 has ~18% annual volatility. A government bond has ~2%. Higher volatility = higher potential return AND higher potential loss.

🔢 Formula

Volatility = Standard Deviation of Returns (annualised)

Related Terms

Asset Allocation
How you split your money across different types of investments —...
Bull Market
When stock prices are rising broadly — investors are optimistic and buying.
Bear Market
When stock prices are falling broadly — investors are fearful and selling.
Beta
Measures how much a stock moves relative to the market — beta >1...
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⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.

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