DEFINITION of 'Historical Volatility  HV'
The realized volatility of a financial instrument over a given time period. Generally, this measure is calculated by determining the average deviation from the average price of a financial instrument in the given time period. Standard deviation is the most common but not the only way to calculate historical volatility.
Also known as "statistical volatility."
INVESTOPEDIA EXPLAINS 'Historical Volatility  HV'
This measure is frequently compared with implied volatility to determine if options prices are over or undervalued. Historical volatility is also used in all types of risk valuations. Stocks with a high historical volatility usually require a higher risk tolerance.

Variance
The spread between numbers in a data set, measuring Variance ... 
Volatility Arbitrage
Trading strategies that attempt to exploit differences between ... 
Historical Returns
The past performance of a security or index. Analysts review ... 
Implied Volatility  IV
The estimated volatility of a security's price. In general, implied ... 
Beta
A measure of the volatility, or systematic risk, of a security ... 
Value At Risk  VaR
A statistical technique used to measure and quantify the level ...

How does implied volatility impact the pricing of options?
Implied volatility is an important aspect of the time value premium of an option. As implied volatility increases, call and ... Read Full Answer >> 
How is implied volatility used in the BlackScholes formula?
Implied volatility is derived from the BlackScholes formula and is an important element for how the value of options are ... Read Full Answer >> 
Can delta be used to calculate price volatility of an option?
The delta of an option is a component of the BlackScholes option pricing formula, which provides the implied volatility ... Read Full Answer >> 
What is an option's implied volatility and how is it calculated?
Implied volatility is a parameter part of an option pricing model, such as the BlackScholes model, that gives the market ... Read Full Answer >> 
How can you calculate volatility in Excel?
Though there are several ways to measure the volatility of a given security, analysts typically look to the historical volatility. ... Read Full Answer >> 
What is the best measure of a given stock's volatility?
When selecting a security for investment, traders look at its historical volatility to help determine the relative risk of ... Read Full Answer >>

Markets
Using Historical Volatility To Gauge Future Risk
Use these calculations to uncover the risk involved in your investments. 
Markets
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Options & Futures
Options Risk Graphs: Visualizing Profit Potential
With a single diagram, you can see how price, time and volatility affect potential gains. 
Options & Futures
An Introduction To Value at Risk (VAR)
Volatility is not the only way to measure risk. Learn about the "new science of risk management". 
Options & Futures
The ABCs Of Option Volatility
The mystery of options pricing can often be explained by a look at implied volatility (IV). 
Investing Basics
Explaining Gamma
Gamma is a measurement of how fast the delta of an option’s price changes after a 1point movement in the underlying security. 
Economics
Explaining the Liquidity Coverage Ratio
The liquidity coverage ratio requires banks and other financial institutions to hold enough cash and liquid assets on hand to weather market stress. 
Fundamental Analysis
Calculating Valuation
Valuation is the process of determining what an asset is worth. 
Economics
Will the Selloff in China Hurt the Global Economy?
Though China is the world’s second largest economy, its volatility in the stock market is unlikely to have an impact on the global or Chinese economy. 
Fundamental Analysis
Understanding Qualitative Analysis
Qualitative analysis is a general term describing the nonmathematical scrutiny used by investors and managers to make investment and business decisions.