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What is Volatility in Stock Market?

What is Volatility in Stock Market?

There are two ways in which one can learn about what is volatility in the stock market. Let’s take a look at the confusing one first and try to understand what volatility is in technical terms.

Volatility in the stock market is all about the standard deviation of the stock market returns from the mean.

The standard deviation of a stock’s annualized returns over a given period shows the range which further tells if the company’s stock price may increase or decrease.

Now let’s simplify the above statement in layman’s terms.

For example, if the share price of Infosys goes rapidly up or comes down quickly in a short time-range, it is said to have high volatility.

Vice versa, if the share price of TCS moves up or comes down slowly and stays stable, it is said to have low volatility.

High volatility should not be a worry if you are a long-term investor.

Volatility in the stock market is an important indicator and it helps estimate the fluctuations that may happen in a short period of time.

While volatility may seem like a bad thing to you, it often provides profitable opportunities. If an investor believes the market volatility is low, it will help him buy additional stocks of fundamentally strong companies for the long run.

If the volatility is high, an investor can simply exit his/her positions for the short term and wait for a better entry price.

We all know that timing the stock markets is no easy task, and it is impossible to say for sure where the markets may head next.

This is when volatility comes handy and traders with the help of decoding volatility in the stock market, prepare strategies, which may or may not work.

In India, the India VIX is a volatility index based on the NSE Nifty index. Here, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 days.

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What is Volatility in Stock Market?

How to Invest Like a Pro During Volatile MarketsMar 23, 2024Top tip for investing in a volatile market.

What are SME Stocks?Mar 19, 2024For investors willing to embrace volatility and support the growth of small and medium enterprises, these stocks can be a valuable addition to a diversified portfolio.

Top 5 Stocks Paying Dividends in March 2024Mar 12, 2024Worried about market volatility? Beat the blues with these stocks declaring dividends soon.

Top 5 Value Stocks in the Market TodayOct 11, 2023Good quality value stocks can potentially offer decent upside in this market.

Indian Bonds to Join JPMorgan Global Bond Index: What It Means for InvestorsOct 1, 2023JPMorgan Chase, the New York-headquartered multinational financial services firm announced the addition of the Indian government bonds to its Global Bond Index- Emerging Markets index suite...Read on.

What are Debt-oriented Mutual Funds: Meaning, Types, Benefits, and FAQsAug 6, 2023Debt Mutual Funds are schemes that predominantly invest in fixed-income generating instruments such as corporate bonds, government bonds, certificates of deposits, treasury bills, etc.

Is the Indian IT Sector a Sleeping Giant?Jul 14, 2023Unlike the Nasdaq, which is at 52-week high, the Nifty IT index has not broken through the resistance zone. What does it mean for Indian IT companies?

What the ideaForge IPO Means for InfosysJun 22, 2023There is a safer way to ride the asymmetrical payoffs of new disruptive tech businesses.

This is the Biggest Risk to the Stock of M&MMay 3, 2023The risk is far bigger than just volatility in quarterly earnings and valuations.

What Bajaj Finance's Record Profits Mean for Investors...Jan 31, 2023It is natural to assume that a company that has BNPL at its core can flounder. But Bajaj Finance proves us wrong.

What is a Stress Test in the Stock Market? And How Does It Affect Your Portfolio?Mar 19, 2024The market regulator administered stress tests on midcap and smallcap funds. Should you worry?

Insider Alert: Top 5 Stocks Where Promoters are Increasing their StakeMar 14, 2024Promoters of these companies are aggressively buying shares from the open market, showing skin in the game. What does it mean for investors?

Top 3 Stocks Paying Dividends in December 2023Nov 28, 2023Worried about market volatility? Beat the blues with these stocks declaring dividends in December 2023.

What Bajaj Finance's Billion Dollar Fund Raising Plan Means...Oct 4, 2023Is it yet another lender trying to lend more at low NPA?

Here's What Chandrayaan-3 Means for Spacetech StocksAug 23, 2023Selecting stocks in India's spacetech ecosystem must be done with sufficient diligence.

Nifty is Approaching 20,000: What Should Investors Do?Jul 20, 2023Nifty is trading above its mean average valuations, find out the best course of action.

IDFC to Merge with IDFC First Bank. What Does it Mean for Investors?Jul 5, 2023On the heels of the HDFC-HDFC Bank merger, comes another one. Here's what you need to know.

Infosys vs HDFC Bank: The 10 Year Bet?May 8, 2023Even a genius mathematician had once been a victim of such market volatility.

What Infosys and HDFC Bank Results Don't Tell YouApr 19, 2023Even a genius mathematician had once been a victim of such market volatility.

5 Ways a Weaker Indian Rupee Benefits You...and Hurts YouSep 29, 2022A falling rupee doesn't mean you need to suffer in silence. There are ways to profit from it too.