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Historical volatility (HV) is a statistical measure of a stock’s price fluctuations over a specific period in the past. It’s calculated using historical price data.
A higher volatility stock, with the same expected return of 7% but with annual volatility of 20%, would indicate returns from approximately negative 33% to positive 47% most of the time (19 times out of 20, or 95%). These estimates assume a normal distribution; in reality stock price movements are found to be leptokurtotic (fat-tailed).
Implied volatility: This column shows the volatility expected from the stock, given the price of the option. Here’s more on how implied volatility works.
For starters, points out Oppenheimer, the speed of the recent rises in stock prices likely reflects much of the good news that Wall Street is expecting on growth in 2025. ... [volatility ...
Equity risk, the risk that stock or stock indices (e.g. Euro Stoxx 50, etc.) prices or their implied volatility will change. Interest rate risk, the risk that interest rates (e.g. Libor, Euribor, etc.) or their implied volatility will change.
Stock prices are modeled as being similar to that of bonds, except with a randomly fluctuating component (called its volatility). As a premium for the risk originating from these random fluctuations, the mean rate of return of a stock is higher than that of a bond.