Market Volatility

Market volatility refers to the rate at which the price of securities or financial assets increases or decreases over a specific period. It is a statistical measure of the dispersion of returns for a given security or market index, often represented by the standard deviation or variance of returns. High volatility indicates that the price of a security can change dramatically in a short time, while low volatility suggests that prices remain relatively stable. Volatility is often an indicator of market sentiment and can be influenced by various factors, including economic indicators, earnings reports, geopolitical events, and changes in market sentiment. Investors and traders use volatility as a gauge for risk; typically, more volatile investments can offer higher potential returns but also come with increased risk of loss.