One query
There is standard deviation used for the calculation.
However I feel that it does not indicate true volatility…
Say the values 3,7,5,8 gives STD as 2.22…
and values 3,5,7,8 also give same STD… However the second one is smooth in terms of time-series.
Any idea how to tackle this case? How can we ensure that the price has increased smoothly over the period. STD does not capture that essence.
I read that people calculate daily return, convert that to annualized one… Then take STD of those returns… That may resolve some aspect, but still it does not capture the time series aspect.
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