Vol: 2, Issue: 1 2012

Page: 135-143

Stock Market Volatility With Respect to Selected Nifty Companies in India

Y.V.M. Chandra Sekhar, Dr. Tarun Kumar Singhal

Since volatility can have different meanings to different people, it is challenging to analyse. When discussing volatility, people tend to be vague. There is also a lot of false information floating around regarding volatility. The most fundamental statistical metric for risk is volatility. Stock price volatility, currency rate volatility, and interest rate volatility are all examples of financial asset price volatility. The degree to which the price of a security, commodity, or market increases or decreases during a short time frame; The key aspect of this concept is that it includes both price increases and cuts. It is during moments of price decline or "correction" that people tend to worry the most about volatility. However, in a steady market, prices move smoothly from one equilibrium point to another as new information is gradually included into prices. In other words, the term "volatility" refers to the extremeness with which an asset's value fluctuates. When there are large price swings up and down in the stock market within a short time frame, we say that the market is volatile. Volatility of stock returns quantifies the unpredictable swings in stock prices. Volatility, or the degree to which stock prices fluctuate over time, is a key indicator of market activity (Gangadhar and Reddy, 2009). Volatility can be described in a number of ways, but the standard deviation is the most popular statistical metric for capturing it. Basically, it calculates how much the current price differs from the moving average price. When this discrepancy increases, so does the resulting volatility.