What is volatility?
Learn about this key investing concept—and how it affects financial markets around the world—in the MoneySense Glossary.
Why are mortgages so expensive in Canada?
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Ratehub.ca
Market volatility refers to the magnitude of fluctuations in financial markets. Canadian and U.S. markets are generally less volatile than those in emerging markets such as Argentina, China and Mexico. Stock price volatility refers to price fluctuations of a stock relative to the overall market, often described using statistics like beta, Sharpe ratio (a measure of risk-adjusted return) and others.
Example: “Investors seeking short-term gains typically prefer stocks with higher volatility, as low-volatility investments are unlikely to make big moves relative to the market in the short term.”
Read more on volatility:
- The meaning of market swings and why you should care
If you’re into day trading or even just checking in occasionally on your investments, market swings are evident. What does all this volatility mean? - Winning portfolios don’t have to be volatile
Outperform with lower volatility. - 15 U.S. stocks to escape volatility
We hunt for stocks to escape stomach fluctuations during turbulent markets
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