What is 'Historical Volatility  HV'
Historical volatility (HV) is 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."
Next Up
BREAKING DOWN '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.
RELATED TERMS

Volatility
1. A statistical measure of the dispersion of returns for a given ... 
TimeVarying Volatility
Fluctuations in volatility over time. Volatility is the standard ... 
Volatility Swap
A forward contract whose underlying is the volatility of a given ... 
Implied Volatility  IV
The estimated volatility of a security's price. 
Volatility Arbitrage
Trading strategies that attempt to exploit differences between ... 
Standard Deviation
1. A measure of the dispersion of a set of data from its mean. ...
Related Articles

Investing
Implied vs. Historical Volatility: The Main Differences
Discover the differences between historical and implied volatility, and how the two metrics can determine whether options sellers or buyers have the advantage. 
Markets
3 Reasons to Ignore Market Volatility (VIX)
If you can keep your head while those about you are losing theirs, you can make a nice return in roiling markets. 
Trading
Volatility's Impact On Market Returns
Find out how to adjust your portfolio when the market fluctuates to increase your potential return. 
Markets
Roller coaster 2016 for Stocks? Exploring Global Stock Volatility
Find out how much volatility global equity investors are in for during 2016 by seeing how much they've experienced over the past five years. 
Managing Wealth
The Uses And Limits Of Volatility
Check out how the assumptions of theoretical risk models compare to actual market performance. 
Trading
A Simplified Approach To Calculating Volatility
Though most investors use standard deviation to determine volatility, there's an easier and more accurate way of doing it. 
Investing
A Simplified Approach To Calculating Volatility
Volatility is sometimes greater than anticipated, but the way it’s measured can compound the problems that occur when it’s unexpected. 
Investing
Using Historical Volatility To Gauge Future Risk
Use these calculations to uncover the risk involved in your investments. 
Managing Wealth
Volatile Stocks: Great, If You Have The Stomach
Volatile stocks can be a lucrative opportunity for shortterm traders. For buyandhold investors, it's a much different story. 
Trading
Tips For Investors In Volatile Markets
Find out what to look out for when trading during market instability.
RELATED FAQS

How can you calculate volatility in Excel?
Understand how to calculate historical volatility using Microsoft Excel from closing price raw data, including why this metric ... Read Answer >> 
What is the best measure of a given stock's volatility?
Understand what metrics are most commonly used to assess a security's volatility compared to its own price history and that ... Read Answer >> 
What is an option's implied volatility and how is it calculated?
Learn what implied volatility is, how it is calculated using the BlackScholes option pricing model and how to use a simple ... Read Answer >> 
How does implied volatility impact the pricing of options?
Learn about two specific volatility types associated with options and how implied volatility can impact the pricing of options. Read Answer >> 
What is the difference between standard deviation and average deviation?
Understand the basics of standard deviation and average deviation, including how each is calculated and why standard deviation ... Read Answer >> 
What does standard deviation measure in a portfolio?
Dig deeper into the investment uses of, and mathematical principles behind, standard deviation as a measurement of portfolio ... Read Answer >>