Historical Volatility - HV
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." |
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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. |
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