# Volatility

This is a statistical measure of volatility called the coefficient of variation. It measures the standard deviation of closing price from its simple moving average.

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Volatility is normally used to measure the risk profile of managed funds.

##### Example

Dow Jones Industrial Average withÂ 52 week Volatility.

## Setup

The default period is 125 days. To alter the default settings - Edit Indicator Settings.

See Indicator Panel for directions on how to set up an indicator.

## Formula

**Volatility = standard deviation of closing price [for n periods] /
average closing price [for n periods]**

*n* periods is normally taken for 1 to 5 years.

### Standard Deviation

For the more technically-minded, Standard Deviation is the basic statistical measure of the dispersion of a population of data observations around a mean. Referred to as STD (or by the Greek symbol sigma) it is the square root of the Variance.

To calculate the Variance:

- Measure the deviation of each data point from the Mean (the average of the entire population).
- Square the deviations.
- Sum the squared deviations.
- Divide the sum by the total number of observations.

STD is calculated as the square root of the Variance.