Volatility is defined as the price range for a period, divided by the average price for the period:
For instance, on 2/4/2011 the average price was 10.87 with a range of 0.12, indicating a Daily Volatility of 1.1%. 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. This is a different concept from the weekly average of daily volatility.
The red plot shows the actual price. Volatility, as measured through various intervals, ( Daily, Weekly, Monthly and Quarterly) is plotted according to color.
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 31 years, the Average Quarterly Volatility of XRX stock price has been 26% while the Average Daily Volatility has been 3%.
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