Volatility is a statistical measure of the dispersion of returns for a given security or market index. It is often used as a proxy for risk, as securities with higher volatility are considered more risky than those with lower volatility. Volatility can be calculated and expressed in a variety of ways, such as standard deviation or beta. It is influenced by a number of factors, including market conditions, economic events, and changes in investor sentiment. Higher volatility can provide greater opportunities for profit but also carries greater potential for losses.
