Volaattisuus

Volaattisuus, often translated as volatility, is a statistical measure of the dispersion of returns for a given security or market index. In simpler terms, it represents the degree of variation of a trading price series over time, usually measured by the standard deviation of logarithmic returns. High volaattisuus indicates that the price of the asset or market has been relatively volatile, meaning it has experienced significant price swings in a short period. Conversely, low volaattisuus suggests that the price has been more stable.

Volaattisuus is a crucial concept in finance, particularly in risk management and option pricing. It is a key component in models like the Black-Scholes model, which is used to determine the fair price of options. Investors often use volaattisuus as an indicator of risk. Assets with higher volaattisuus are generally considered riskier because their potential for large losses is greater. However, high volaattisuus also presents opportunities for greater gains.

Traders and investors use various metrics to measure volaattisuus, including historical volaattisuus and implied volaattisuus. Historical volaattisuus is calculated using past price data, while implied volaattisuus is derived from the prices of options traded on an asset and represents the market's expectation of future volaattisuus. Understanding volaattisuus helps in making informed investment decisions and managing portfolio risk effectively.