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This chart shows Volatility for Convergys Corporation, defined to be the price range as a portion of the average price: For instance, on 8/30/2010 the average price was 10.24 with a range of 0.16, indicating a Daily Volatility of 1.5%. 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. The red plot shows the actual price. Volatility, as measured through various intervals, ( Daily, Weekly, Monthly and Quarterly) is plotted according to color. According to academic theory, Volatility is exactly equal to Risk. But investors often make a distinction between these two concepts. The different character of Volatility as seen in different time frames, lends some support to the investor's view. During 12 years, the Average Quarterly Volatility of CVG stock price has been 33% while the Average Daily Volatility has been 4%. |
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If you have ever seen a "yield curve" you should be able to understand the concept behind this "yield curve". Each Volatility Curve is a snapshot in time. As the timespan across which Volatility is measured increases, the Volatility is expected to increase. However, as seen in this plot of the CVG Volatility Curve, the increase is not constant. |
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A frequency distribution of the green points on the first chart (the daily volatility) yields this histogram. |
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In a similar vein, the Frequency Distribution of the Quarterly Volatility is plotted here. This is the distribution of the values plotted in purple on the top chart from this page. |
Refined Volatility Risk Analysis for CVG : |
| Tuesday, August 31, 2010: We have news on Boston Scientific Corporation, ticker symbol BSX. A favorable momentum event has happened. Also, there are breaking events concerning Netease.com, Inc. and Makita Corp.. From the News Archive: (8/30/2010 ) Favorable events happened at Reynolds American, Inc., GameStop Corp., and ASML Holding N.V.. Meanwhile, bad news came from Lincoln National Corporation. |