Friday, 15 June 2018

5 stocks that can remain volatile in today's trade


Volatility is a statistical measure of the dispersion of returns for a given security or market index. It is measured by using variance or the square root of variance i.e. standard deviation. Volatility is a double-edged sword; a surge in volatility could either benefit a trader or end up triggering his stop loss. 

Historical Volatility 

Historical volatility is a measure of how much the stock price fluctuated during a given time period (in past). It is referred to as the asset's actual or realized volatility.Traders make use of historical volatility to estimate the future movement, but there is a chance that the future volatility could deviate from the expected value as the factors influencing the price could change. Major fundamental changes could cause the asset price to stray away from the expected historical volatility. 

 Interpretation of Historical Volatility

  • Historical Volatility does not measure direction; it just measures how much the security's price is deviating from its average.
  • When a security’s Historical Volatility is rising, or higher than normal, it means prices are moving up and down farther/more quickly than usual and is a sign that something is likely to happen, or has already happened, regarding the underlying security.
  • When a security’s Historical Volatility is falling, it implies that the uncertainty regarding the security has reduced and things are returning back to usual.  
Following is the list of stocks that have witnessed maximum change in their historical volatility levels in yesterday's trade and are likely to remain volatile in today's trade:

Historical Volatility of Active Stocks
UnderlineHV % Chg
MINDTREE3411.0
DIVISLAB429.4
AUROPHARMA457.2
TORNTPHARM366.5
PAGEIND394.5

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