What is daily volatility (σ)?

Daily volatility (σ) is the typical day-to-day price swing for a stock, in dollars, measured over a trailing window.

Is a more volatile stock a worse stock?

Not by itself. Volatility measures how far a price swings, not which way it goes. A volatile stock gives larger gains and larger losses than a steady one, so it asks for a stronger stomach and a smaller share of a portfolio, but it is not automatically a bad company.

How is daily volatility measured?

Take the day-to-day percentage changes in a stock over a trailing window, such as 30 trading days, and measure how widely they spread around their average. The result is the standard deviation, usually written σ. A higher σ means bigger typical daily moves.

Frequently asked questions

What counts as high volatility?

It is relative. A daily swing that is ordinary for a small technology company would be unusual for a utility, so compare a stock with its own history and with its sector.

Does low volatility mean low risk?

No. Calm periods can end suddenly. Volatility describes recent behavior and says nothing certain about what comes next.

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Educational research only — not investment advice.