Asset Allocation & Risk

What is volatility and how is it measured?

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Volatility is the degree to which prices have risen and fallen over a given period, usually measured by the standard deviation of returns.

There is historical volatility, calculated from past prices, and implied volatility, the market's expected volatility as reflected in option prices. High volatility means that both large gains and large losses can occur within a short period.

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This answer is general financial information as of 14-10-2026, not investment advice. Rules and tax rates change, so please also check the latest guidance from the source institution.