Definition
A statistical measure of the dispersion of returns for a security or market index, indicating the rate at which the price increases or decreases. Higher volatility implies greater risk but also potential for higher returns, while lower volatility suggests more stable and predictable price movement.
Example Usage
"Emerging market stocks typically exhibit higher volatility than established markets, requiring investors to have a higher risk tolerance.”
Related Terms
Bear MarketStandard DeviationBetaVIX (Volatility Index)Market Turbulence
Tags
Risk MeasurementMarket BehaviorTradingRisk Management
Course Module
Module 1: Introduction to Financial Markets