An important investment characteristic is volatility, which measures how much and how quickly the value of a security or market sector changes. The more volatile a security, the more its value fluctuates, and the more risky it can be.
Volatility is usually measured by using beta. Beta measures an investment’s volatility in relation to the overall market, which is considered to have a beta of 1. While volatile securities have the potential to produce substantial returns, there is an equally good chance that their value could falter. Even the most aggressive investors might choose other asset classes to help balance their portfolios.
VIX is a trademarked ticker symbol for the CBOE Volatility Index, a popular measure of the implied volatility of S&P 500 index options. Often referred to as the fear index or the fear gauge, it represents one measure of the market’s expectation of stock market volatility over the next 30 day period.
The idea of a volatility index, and financial instruments based on such an index, was first developed and described by Prof. Menachem Brenner and Prof. Dan Galai in 1986. Professors Brenner and Galai published their research in the academic article “New Financial Instruments for Hedging Changes in Volatility,” which appeared in the July/August 1989 issue of Financial Analysts Journal.
On Friday (Sep-18), CBOE Volatility Index (VIX) rose +5.39% or 1.14 points to close at $22.28. The index was opened at $23.07 and floating between $20.98 – $23.99 in the whole trading session. Over the last 52-Weeks period, the index hit the highest point of $53.29 and $10.88 lowest point in the same period.
With the yesterday’s trade close Organovo Holdings Inc (NYSEMKT:ONVO) has weekly volatility of 14.12% and its monthly volatility of 11.10%. ONVO opened the day at $3.55 and closed at $3.98 with the gain of 6.70%. The stock currently has Beta of 1.00 where; Beta indicates the volatility of the security. ONVO currently has Average True Range (ATR) of 0.30 along with the Relative Strength Index (RSI) of 72.43. The company after the yesterday closing has a market capitalization of 367.86 billion.
Triangle Petroleum Corporation (NYSEMKT:TPLM) after settling the last trading session has volatility 14.76% for the month and 12.11% for the week with Beta of 2.20 (the Beta measures the volatility of the security in relation to the market). The company’s security currently has RSI (Relative Strength Index) of 29.85 and ATR (Average True Range) of 0.36. The stock closed the last trading session with market capitalization of 152.52 billion and its shares got a dip of -7.34% closing at $2.02 with trading volume of 1.53 million shares.
After the last market close Bill Barrett Corporation (NYSE:BBG) has beta of 1.08 (Beta is the single most important measure of stock risk or volatility) while the monthly and weekly volatility of the stock stands at 13.09% and 12.55% respectively. The stock has current Average True Range (ATR) of 0.50 and Relative Strength Index (RSI) of 36.32. In the last trading session BBG closed at $3.51 with an decrease of -7.87%. The company has current market capitalization of 176.33 billion.