Historical Volatility (HV) is a statistical measure of the
dispersion of returns for a given security or market index over a given
period of time. Generally, this measure is calculated by determining the
average deviation from the average price of a financial instrument in
the given time period. Using standard deviation is the most common, but
not the only, way to calculate Historical Volatility.
The higher the Historical Volatility value, the riskier the security.
However, that is not necessarily a bad result as risk works both ways -
bullish and bearish, i.e: Historical Volatility is not a directional
indicator and should not be used as other directional indicators are
used. Use to to determine the rising and falling price change
Author: Mladen Rakic