- Find the mean of the data set. ...
- Calculate the difference between each data value and the mean. ...
- Square the deviations. ...
- Add the squared deviations together. ...
- Divide the sum of the squared deviations (82.5) by the number of data values.
How do you calculate stock volatility in Excel?
To calculate the volatility of a given security in a Microsoft Excel spreadsheet, first determine the time frame for which the metric will be computed.Step 1: Timeframe. ... Step 2: Enter Price Information. ... Step 3: Compute Returns. ... Step 4: Calculate Standard Deviations. ... Step 5: Annualize the Period Volatility.
What is the volatility of a stock?
Volatility is the standard deviation of a stock's annualised returns over a given period and shows the range in which its price may increase or decrease. If the price of a stock fluctuates rapidly in a short period, hitting new highs and lows, it is said to have high volatility.
What is a good volatility?
The higher the standard deviation, the higher the variability in market returns. The graph below shows historical standard deviation of annualized monthly returns of large US company stocks, as measured by the S&P 500. Volatility averages around 15%, is often within a range of 10-20%, and rises and falls over time.
What is considered a high volatility?
When a stock that normally trades in a 1% range of its price on a daily basis suddenly trades 2-3% of its price, it's considered to be experiencing “high volatility.”