have an account?【sign in】how to calculate price volatility in excel?
cullauthorPrice volatility is a measure of the fluctuations in the price of a financial asset, such as stocks, bonds, or currencies. It is often used by investors and traders to gauge the risk associated with their investments. Calculating price volatility in Excel can be a useful tool for making more informed decisions. This article will provide a step-by-step guide on how to calculate price volatility in Excel using the historical price data of a financial asset.
Step 1: Collect Historical Price Data
The first step in calculating price volatility is to collect the historical price data of the financial asset you want to analyze. This can be done by accessing the stock quote website, such as Yahoo Finance, Google Finance, or another similar source.
Step 2: Calculate the Moving Average
Before calculating price volatility, it is necessary to calculate the moving average, which is a smoothing technique that eliminates short-term fluctuations in the price data. To calculate the moving average, perform the following steps:
1. Select the price data for the specified number of days (for example, 20 days).
2. Go to "Insights" or "Data" in the top menu of Excel.
3. Click "Moving Average" and select "Moving Average (Simple)" from the drop-down menu.
4. Enter the specified number of days in the "Period" box and click "OK." Excel will calculate and display the moving average for the selected period.
Step 3: Calculate Price Volatility
Now that you have the moving average, you can calculate price volatility. To do this, follow these steps:
1. Select the price data for the specified number of days (for example, 20 days).
2. Go to "Insights" or "Data" in the top menu of Excel.
3. Click "Volatility" and select "Price Volatility (Daily)" from the drop-down menu.
4. Enter the specified number of days in the "Period" box and click "OK." Excel will calculate and display the price volatility for the selected period.
Calculating price volatility in Excel can be a useful tool for investors and traders to gauge the risk associated with their financial assets. By using the moving average technique, you can better understand the fluctuations in the price of a financial asset and make more informed decisions. Remember to analyze the price volatility for different time periods to get a better understanding of the overall trend and risk associated with the asset.