Historical Volatility
Historical volatility describes the price movement of an underlying security in the past. Learn how historical volatility is calculated and how you can use it in your trading.
Historical volatility (HV) describes the past price movement of an underlying security. Historical volatility is also known as statistical volatility because it quantifies the security’s actual volatility over a defined timeframe.
Historical volatility calculates a backward-looking moving average of a security’s realized volatility. HV is essentially a snapshot of how much volatility a security experienced in a specific period and can be used to compare two different assets.
Historical Volatility does not quantify a security’s future expected move like implied volatility, but it can be used as a basis for what might happen based on what happened in the past.
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