Active Stocks
Tue Apr 16 2024 15:59:30
  1. Tata Steel share price
  2. 160.05 -0.53%
  1. Infosys share price
  2. 1,414.75 -3.65%
  1. NTPC share price
  2. 359.40 -0.54%
  1. State Bank Of India share price
  2. 751.90 -0.65%
  1. HDFC Bank share price
  2. 1,509.40 0.97%
Business News/ Market / Stock-market-news/  What is market volatility and why it bothers investors
BackBack

What is market volatility and why it bothers investors

A stock or is said to be volatile if its price moves up and down frequently and by a substantial amount

Photo: MintPremium
Photo: Mint

In capital markets parlance, volatility refers to a rapid change in price. A stock or is said to be volatile if its price moves up and down frequently and by a substantial amount. In securities markets, it’s the downward volatility that bothers investors more. One way to measure volatility is by calculating the standard deviation of a set of returns. This shows the margin by which price shifts away from the mean. In case of equity, the short-term price returns tend to be volatile as daily prices get impacted by news flow, sentiments and random events.

As the daily price volatility is not representative of the fundamental factors contributing to price, for long-term investors, it is advisable to focus on long term volatility of a security.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 18 Oct 2018, 09:11 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App