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historical volatility


Definition

HV. Degree or level of up and down movement in a value over time. In securities trading, it refers to price fluctuation over a standard period such as a day, week, month, quarter, or year. Historical volatility is computed by taking the standard deviation of price changes over the chosen period and is usually compared with the implied volatility in pricing an option. It is directly related to the level of risk associated with a security: low HV means low risk, and high HV means high risk. also called statistical volatility.


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