This chart shows Volatility for The Bank of New York Mellon Corporation, defined to be the price range as a portion of the average price:
So, to derive the Daily Volatility on 2/15/2011 of 2.8%, the price range for the day (0.89) was divided by the average price (31.41). Daily Volatility (the daily range as a portion of the daily average price) is plotted in green. Blue is Weekly Volatility, which is the weekly range as a portion of the weekly average price. It is important to avoid confusing this with the weekly average of the daily volatility, which is a completely different concept.
For reference, the price is plotted in red. The remaining marks on the plot correspond to the Volatility measured across several time intervals.
Investors often make a distinction between the concept of Volatility, and the concept of Risk. Academics define them to be exactly equivalent, but as can be seen here, there is good reason to distinguish between the levels of volatility or risk experienced across different time frames. During 27 years, the Average Quarterly Volatility of BK stock price has been 24% while the Average Daily Volatility has been 3%.
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