IN PLAIN ENGLISH
How much a price swings up and down around its average — the size of the bumps.
WHERE YOU MEET IT
Not calculated by the app. The Beta figure in a holding's detail measures movement with the market, not the size of the swings.
WATCH OUT FOR
Low volatility isn't safety. A calm price can still fall a long way.
FULL DEFINITION
A statistical measure of the dispersion of returns for a given security or market index, usually the standard deviation of those returns.
EXAMPLE
A stock that moves between $10 and $100 in a month is very volatile.
HOW IT'S CALCULATED
Not calculated by the app. Volatility is usually measured as the standard deviation of a price's daily returns, often annualised by multiplying by the square root of the number of trading days in a year (about 252). The only standard deviation the app works out is inside the Price Chart's Bollinger Bands, which measure how widely prices spread over the last 20 periods. The Beta figure in a holding's detail is a different measure: how much the share has moved relative to the market, not the size of its swings. A fund's detail shows Volatility (3Y), the data provider's own three-year figure for the fund.
EXPLAINED IN
Educational content only. It is not personal financial advice.