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1. Shard Calculation

Query:

Response:

Calculated Shard: 88 (from laksa086)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa088.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical, ml_categories_json AS ml_categories_json, ml_types_json AS ml_types_json, ml_intent_types_json AS ml_intent_types_json, meta_language AS meta_language, attrs_author AS attrs_author, ifNull(toUnixTimestamp(attrs_publish_time), 0) AS attrs_publish_time, ifNull(toUnixTimestamp(attrs_original_publish_time), 0) AS attrs_original_publish_time, ifNull(attrs_is_republished, 0) AS attrs_is_republished, ifNull(attrs_nr_words, 0) AS attrs_nr_words, ifNull(attrs_boilerpipe_nr_words, 0) AS attrs_boilerpipe_nr_words, ifNull(body_ext_links_number, 0) AS body_ext_links_number, ifNull(body_int_links_number, 0) AS body_int_links_number, ifNull(meta_nofollow, 0) AS meta_nofollow, ifNull(meta_noarchive, 0) AS meta_noarchive, ifNull(props_was_rendered, 0) AS props_was_rendered, ifNull(src_redirect, \'\') AS src_redirect, ifNull(download_time_msec, 0) AS download_time_msec, ifNull(download_ttfb_msec, 0) AS download_ttfb_msec, ifNull(download_size, 0) AS download_size FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://www.fool.com/investing/how-to-calculate/annualized-volatility/\')), getAhrefsUnparsedNoserviceFromURL(\'https://www.fool.com/investing/how-to-calculate/annualized-volatility/\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/www.fool.com\/investing\/how-to-calculate\/annualized-volatility\/","crawl_time":1775986597,"first_indexed_time":1710207328,"http_code":200,"src_unparsed":"com,fool!www,\/investing\/how-to-calculate\/annualized-volatility\/ s443","src_root_hash":"16263700115757751488","history_drop_reason":null,"meta_title":"How to Calculate Annualized Volatility | The Motley Fool","meta_descriptions":["Unlock insights into stock volatility. Learn to calculate and annualize using historical data for informed investment strategies."],"attrs_boilerpipe_text":"Annualized volatility measures how much a stock price varies over one year. Many investors use volatility to define the riskiness of a stock, bond, or asset class. In addition, assumptions about volatility are used to price\noptions\n.\nImage source: Getty Images.\nNo investor invests without comparing risk to reward, so annualized volatility is integral to any investor's toolbox. We'll outline how to calculate volatility and provide an example to serve as a reference point for readers interested in the concept.\nWhat is volatility?\nThe most common way to\nmeasure volatility in finance\nis through standard deviation. This is a mathematical expression of how much a variable can differ from its average.\nTo help investors grasp the concept of volatility, consider investing in two funds. Fund A has returned 10% each year over the last three years. Fund B has returned 8%, 12%, and 10%.\nBoth funds have an average\nyearly return\nof 10%, but Fund B is more volatile because its returns vary more. Using a simple Excel worksheet and the standard deviation function (stdev), you can see that Fund A's standard deviation is zero (meaning its returns don't vary around the mean). In contrast, the standard deviation for Fund B is 2%.\nAssuming a normal distribution -- a bell-shaped curve that assumes 68% of variables are within one standard deviation from the mean and 95% of variables are within two standard deviations -- you could argue the following for Fund B:\n68% of the time, the fund will generate a return between 8% and 12%.\n95% of the time, the fund will generate a return between 6% and 14%.\nThe above example is simplified to illustrate a point. However, in the real world, investors won't always have the time or patience to wait years to calculate potential returns and volatility.\nThat's where the idea of annualized volatility comes in. By annualizing short-term data, investors can know\nhow volatile a stock will be\nover the course of a year just by using the data. In this case, I will illustrate the concept by examining the monthly returns on two U.S.-listed stocks.\nAnnualized volatility formula\nBut first, here's a look at the formula for\ncalculating annualized volatility\n.\nAnnualized volatility = standard deviation (volatility) multiplied by the square root of the periods in the year.\nFor example, you might calculate the volatility of daily stock returns. Since there are roughly 252 trading days in the year, you multiply the square root of 252 (15.9) by the daily volatility to get the annualized volatility. (We'll use monthly returns in the case below, so the time period will be 12 times a year.)\nCalculating a stock's volatility\nThe chart below shows the monthly returns for two stocks. Just from the chart's appearance, Stock A is more volatile than Stock B, but this needs to be expressed mathematically.\nData source: author's analysis.\nThe first step is to calculate the monthly volatility of each stock's return. You can easily do this using an Excel spreadsheet and calculating the standard deviation (stdev function) of the 12 monthly returns for each\nstock\n, as shown in the chart above.\nDoing this gives a monthly standard deviation (volatility) of 17.9% for Stock A and just 3.6% for Stock B. This confirms the optics in the chart. In other words, Stock A is a more volatile -- and, some might say, riskier -- investment than Stock B.\nAnnualizing volatility\nReturning to the formula for annualized volatility, the figures above are monthly returns. There are 12 months in the year, so the annualized volatility is calculated by multiplying the square root of 12 by the monthly volatility. Here's how we calculate annualized volatility for the two stocks:\nStock A annualized volatility = 17.9% multiplied by the square root of 12, resulting in 62%\nStock B annualized volatility = 3.6% multiplied by the square root of 12, resulting in 12.5%\nWe can see that Stock A is notably more volatile than Stock B, which might be a factor to consider when\ninvesting in stocks\n.\nThe bottom line on calculating annualized volatility\nIt's important to remember that annualized volatility is just one of many tools investors must consider. The history of investing is full of\ninvestment strategies\nthat demonstrated low volatility and good returns -- right before they blew up in an investor's face.\nIn addition, the data is always historical, and there's no guarantee that stock returns will follow historical patterns. The assumption that volatility or standard deviation is equivalent to risk is also an open question.\nRelated investing topics\nFor example, going back to the first example above, Fund B is\nseen\nas riskier because its returns are more volatile than Fund A. However, the implied annual return is precisely the same at 10% for both funds. All told, volatility and annualized volatility are simply useful concepts that can serve as a starting point for thinking about\nrisk and reward\nin investing.\nFAQ\nAbout the Author\nLee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. \n\nPrior to The Motley Fool, Lee was a Civil Engineer and Investment Manager.\n\nHe holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment.\n\nLee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community.\nThe Motley Fool has a\ndisclosure policy\n.","attrs_markdown":"[Accessibility 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[Home](https:\/\/www.fool.com\/)\\>\n2. [Investing](https:\/\/www.fool.com\/investing-news\/)\\>\n3. [How To Calculate](https:\/\/www.fool.com\/investing\/how-to-calculate\/)\\>\n4. Annualized Volatility\n# How to Calculate Annualized Volatility\nBy [Lee Samaha](https:\/\/www.fool.com\/author\/2492\/) – Updated Apr 30, 2025 at 10:20 PM EST\n\n[Follow us](https:\/\/profile.google.com\/cp\/CgkvbS8wNTc4bWs)\n\nShare\n\n## Key Points\n- Annualized volatility is calculated as standard deviation times square root of periods.\n- High annualized volatility indicates greater price variability and potential risk.\n- Investors use annualized volatility to compare risk and make informed choices.\n\n- [What is volatility?](https:\/\/www.fool.com\/investing\/how-to-calculate\/annualized-volatility\/#toc_what-is-volatility)\n- [Annualized volatility formula](https:\/\/www.fool.com\/investing\/how-to-calculate\/annualized-volatility\/#toc_annualized-volatility-formula)\n- [Calculating volatility](https:\/\/www.fool.com\/investing\/how-to-calculate\/annualized-volatility\/#toc_calculating-volatility)\n- [Annualizing volatility](https:\/\/www.fool.com\/investing\/how-to-calculate\/annualized-volatility\/#toc_annualizing-volatility)\n- [FAQ](https:\/\/www.fool.com\/investing\/how-to-calculate\/annualized-volatility\/#toc_faq)\n\nAnnualized volatility measures how much a stock price varies over one year. Many investors use volatility to define the riskiness of a stock, bond, or asset class. In addition, assumptions about volatility are used to price [options](https:\/\/www.fool.com\/terms\/o\/options\/).\n\n![Yellow road sign warning Volatility Ahead against backdrop of beautiful blue sky.](https:\/\/m.foolcdn.com\/media\/dubs\/original_images\/Slide_14_-__yellow_road_sign_warning_volatility_ahead_against_backdrop_of_.jpg?_w=3840)\n\nImage source: Getty Images.\n\nNo investor invests without comparing risk to reward, so annualized volatility is integral to any investor's toolbox. We'll outline how to calculate volatility and provide an example to serve as a reference point for readers interested in the concept.\n\n## What is volatility?\nThe most common way to [measure volatility in finance](https:\/\/www.fool.com\/terms\/s\/stock-market-volatility\/) is through standard deviation. This is a mathematical expression of how much a variable can differ from its average.\n\nTo help investors grasp the concept of volatility, consider investing in two funds. Fund A has returned 10% each year over the last three years. Fund B has returned 8%, 12%, and 10%.\n\nBoth funds have an average [yearly return](https:\/\/www.fool.com\/investing\/how-to-invest\/stocks\/how-to-convert-daily-returns-to-annual-returns\/) of 10%, but Fund B is more volatile because its returns vary more. Using a simple Excel worksheet and the standard deviation function (stdev), you can see that Fund A's standard deviation is zero (meaning its returns don't vary around the mean). In contrast, the standard deviation for Fund B is 2%.\n\nAssuming a normal distribution -- a bell-shaped curve that assumes 68% of variables are within one standard deviation from the mean and 95% of variables are within two standard deviations -- you could argue the following for Fund B:\n\n- 68% of the time, the fund will generate a return between 8% and 12%.\n- 95% of the time, the fund will generate a return between 6% and 14%.\n\nThe above example is simplified to illustrate a point. However, in the real world, investors won't always have the time or patience to wait years to calculate potential returns and volatility.\n\nThat's where the idea of annualized volatility comes in. By annualizing short-term data, investors can know [how volatile a stock will be](https:\/\/www.fool.com\/investing\/stock-market\/types-of-stocks\/volatile-stocks\/) over the course of a year just by using the data. In this case, I will illustrate the concept by examining the monthly returns on two U.S.-listed stocks.\n\n## Annualized volatility formula\nBut first, here's a look at the formula for [calculating annualized volatility](https:\/\/www.fool.com\/investing\/how-to-invest\/stocks\/how-to-calculate-stock-volatility\/).\n\n- Annualized volatility = standard deviation (volatility) multiplied by the square root of the periods in the year.\n\nFor example, you might calculate the volatility of daily stock returns. Since there are roughly 252 trading days in the year, you multiply the square root of 252 (15.9) by the daily volatility to get the annualized volatility. (We'll use monthly returns in the case below, so the time period will be 12 times a year.)\n\n## Calculating a stock's volatility\nThe chart below shows the monthly returns for two stocks. Just from the chart's appearance, Stock A is more volatile than Stock B, but this needs to be expressed mathematically.\n\n![Chart showing monthly returns for two stocks.](https:\/\/m.foolcdn.com\/media\/dubs\/original_images\/Monthly_Returns.png?_w=3840)\n\nData source: author's analysis.\n\nThe first step is to calculate the monthly volatility of each stock's return. You can easily do this using an Excel spreadsheet and calculating the standard deviation (stdev function) of the 12 monthly returns for each [stock](), as shown in the chart above.\n\nDoing this gives a monthly standard deviation (volatility) of 17.9% for Stock A and just 3.6% for Stock B. This confirms the optics in the chart. In other words, Stock A is a more volatile -- and, some might say, riskier -- investment than Stock B.\n\n## Annualizing volatility\nReturning to the formula for annualized volatility, the figures above are monthly returns. There are 12 months in the year, so the annualized volatility is calculated by multiplying the square root of 12 by the monthly volatility. Here's how we calculate annualized volatility for the two stocks:\n\n- Stock A annualized volatility = 17.9% multiplied by the square root of 12, resulting in 62%\n- Stock B annualized volatility = 3.6% multiplied by the square root of 12, resulting in 12.5%\n\nWe can see that Stock A is notably more volatile than Stock B, which might be a factor to consider when [investing in stocks](https:\/\/www.fool.com\/investing\/how-to-invest\/stocks\/).\n\n## The bottom line on calculating annualized volatility\nIt's important to remember that annualized volatility is just one of many tools investors must consider. The history of investing is full of [investment strategies]() that demonstrated low volatility and good returns -- right before they blew up in an investor's face.\n\nIn addition, the data is always historical, and there's no guarantee that stock returns will follow historical patterns. The assumption that volatility or standard deviation is equivalent to risk is also an open question.\n\n## Related investing topics\n\n[How to Calculate the Net Worth on Financial StatementsThe net worth of a business is also known as its book value or its owners' (stockholders') equity.](https:\/\/www.fool.com\/investing\/how-to-calculate\/net-worth-on-financial-statements\/)\n\n[How to Calculate the Present Value of Free Cash FlowHere's an explanation and simple example of how to calculate the present value of free cash flow.](https:\/\/www.fool.com\/investing\/how-to-calculate\/present-value-of-free-cash-flow\/)\n\n[How to Calculate the Percentage of Annual DeclineHere's what you need to know to calculate annual decline over any time period.](https:\/\/www.fool.com\/investing\/how-to-calculate\/percentage-of-annual-decline\/)\n\n[Here's How to Calculate Future Expected Stock PriceCalculating the future expected stock price can be useful, but no single equation can be used universally.](https:\/\/www.fool.com\/investing\/how-to-invest\/stocks\/how-to-calculate-future-stock-price\/)\n\nFor example, going back to the first example above, Fund B is *seen* as riskier because its returns are more volatile than Fund A. However, the implied annual return is precisely the same at 10% for both funds. All told, volatility and annualized volatility are simply useful concepts that can serve as a starting point for thinking about [risk and reward](https:\/\/www.fool.com\/research\/gen-z-millennial-investors-risk\/) in investing.\n\n## FAQ\n## How to calculate annualized volatility: FAQ\n### What is the formula for annualized volatility?\n### How is volatility calculated?\n### What is annualized volatility used for?\n\n### About the Author\n![Lee Samaha](https:\/\/g.foolcdn.com\/avatar\/4552318\/large.ashx?_w=3840)\n\nLee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. Prior to The Motley Fool, Lee was a Civil Engineer and Investment Manager. He holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment. Lee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community.\n\n[TMFSaintGermain](https:\/\/www.fool.com\/author\/2492\/)\n\n[@LeeSamaha](https:\/\/x.com\/LeeSamaha)\n\nThe Motley Fool has a [disclosure policy](https:\/\/www.fool.com\/legal\/fool-disclosure-policy\/).\n\n## Read Next\n[How to Calculate Net Change in Cash From a Cash Flow Statement](https:\/\/www.fool.com\/investing\/how-to-calculate\/net-change-in-cash\/)\n\n[How to Calculate Accrued Interest](https:\/\/www.fool.com\/investing\/how-to-calculate\/accrued-interest\/)\n\n[How to Calculate Semi-Annual Bond Yield](https:\/\/www.fool.com\/investing\/how-to-calculate\/semi-annual-bond-yield\/)\n\n[How to Calculate a Monthly Return on Investment](https:\/\/www.fool.com\/investing\/how-to-calculate\/monthly-return-on-investment\/)\n\n[How to Calculate the Number of Shares a Company Has](https:\/\/www.fool.com\/investing\/how-to-calculate\/shares-a-company-has\/)\n\n[How to Calculate the Price of a Treasury Bill](https:\/\/www.fool.com\/investing\/how-to-calculate\/price-of-treasury-bills\/)\n\n## Premium Investing Services\nInvest better with The Motley Fool. 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All rights reserved.\n\nMarket data powered by [Xignite](https:\/\/xignite.com\/) and [Polygon.io](https:\/\/polygon.io\/).\n\nAbout The Motley Fool\n\n- [About Us](https:\/\/www.fool.com\/about\/)\n- [Careers](https:\/\/careers.fool.com\/)\n- [Research](https:\/\/www.fool.com\/research\/)\n- [Newsroom](https:\/\/www.fool.com\/contact\/newsroom\/)\n- [Contact](https:\/\/www.fool.com\/legal\/contact-us\/)\n- [Advertise](https:\/\/www.fool.com\/cdn-cgi\/l\/email-protection#81e0e5e8eff0f4e8f3e8e4f2c1e7eeeeedafe2eeec)\n\nOur Services\n\n- [All Services](https:\/\/www.fool.com\/services\/)\n- [Stock Advisor](https:\/\/www.fool.com\/services\/stock-advisor\/)\n- [Epic](https:\/\/www.fool.com\/services\/epic\/)\n- [Epic Plus](https:\/\/www.fool.com\/services\/epic-plus\/)\n- [Fool Portfolios](https:\/\/www.fool.com\/services\/fool-portfolios\/)\n- [Fool One](https:\/\/www.fool.com\/services\/one\/)\n- [Motley Fool Money](https:\/\/www.fool.com\/money\/)\n\nAround the Globe\n\n- [Fool UK](https:\/\/www.fool.co.uk\/)\n- [Fool Australia](https:\/\/www.fool.com.au\/)\n- [Fool Canada](https:\/\/www.fool.ca\/)\n\nFree Tools\n\n- [CAPS Stock Ratings](https:\/\/caps.fool.com\/)\n- [Discussion Boards](https:\/\/discussion.fool.com\/)\n- [Calculators](https:\/\/www.fool.com\/calculators\/index\/)\n- [Financial Dictionary](https:\/\/www.fool.com\/terms\/)\n\nAffiliates & Friends\n\n- [Motley Fool Asset Management](https:\/\/www.fool.com\/affiliates\/mfam\/)\n- [Motley Fool Wealth Management](https:\/\/www.fool.com\/affiliates\/mfwm\/)\n- [Motley Fool Ventures](https:\/\/www.fool.com\/affiliates\/ventures\/)\n- [Fool Community Foundation](https:\/\/www.fool.com\/affiliates\/foundation\/)\n- [Become an Affiliate Partner](https:\/\/www.fool.com\/affiliates\/)\n\n- [Terms of Use](https:\/\/www.fool.com\/legal\/terms-and-conditions\/fool-rules\/ \"Terms of Use\")\n- [Privacy Policy](https:\/\/www.fool.com\/legal\/privacy-statement\/ \"Privacy Policy\")\n- [Disclosure Policy](https:\/\/www.fool.com\/legal\/fool-disclosure-policy\/ \"Disclosure Policy\")\n- [Accessibility Policy](https:\/\/www.fool.com\/legal\/accessibility-policy\/ \"Accessibility Policy\")\n- [Copyright, Trademark and Patent Information](https:\/\/www.fool.com\/legal\/stuff-we-own\/ \"Copyright, Trademark and Patent Information\")\n- [Terms and Conditions](https:\/\/www.fool.com\/legal\/terms-and-conditions\/ \"Terms and Conditions\")\n- [Do Not Sell My Personal Information](https:\/\/www.fool.com\/data-protection\/ccpa-update\/ \"Do Not Sell My Personal Information\")","attrs_readable_markdown":"Annualized volatility measures how much a stock price varies over one year. Many investors use volatility to define the riskiness of a stock, bond, or asset class. In addition, assumptions about volatility are used to price [options](https:\/\/www.fool.com\/terms\/o\/options\/).\n\n![Yellow road sign warning Volatility Ahead against backdrop of beautiful blue sky.](https:\/\/m.foolcdn.com\/media\/dubs\/original_images\/Slide_14_-__yellow_road_sign_warning_volatility_ahead_against_backdrop_of_.jpg?_w=3840)\n\nImage source: Getty Images.\n\nNo investor invests without comparing risk to reward, so annualized volatility is integral to any investor's toolbox. We'll outline how to calculate volatility and provide an example to serve as a reference point for readers interested in the concept.\n\n## What is volatility?\nThe most common way to [measure volatility in finance](https:\/\/www.fool.com\/terms\/s\/stock-market-volatility\/) is through standard deviation. This is a mathematical expression of how much a variable can differ from its average.\n\nTo help investors grasp the concept of volatility, consider investing in two funds. Fund A has returned 10% each year over the last three years. Fund B has returned 8%, 12%, and 10%.\n\nBoth funds have an average [yearly return](https:\/\/www.fool.com\/investing\/how-to-invest\/stocks\/how-to-convert-daily-returns-to-annual-returns\/) of 10%, but Fund B is more volatile because its returns vary more. Using a simple Excel worksheet and the standard deviation function (stdev), you can see that Fund A's standard deviation is zero (meaning its returns don't vary around the mean). In contrast, the standard deviation for Fund B is 2%.\n\nAssuming a normal distribution -- a bell-shaped curve that assumes 68% of variables are within one standard deviation from the mean and 95% of variables are within two standard deviations -- you could argue the following for Fund B:\n\n- 68% of the time, the fund will generate a return between 8% and 12%.\n- 95% of the time, the fund will generate a return between 6% and 14%.\n\nThe above example is simplified to illustrate a point. However, in the real world, investors won't always have the time or patience to wait years to calculate potential returns and volatility.\n\nThat's where the idea of annualized volatility comes in. By annualizing short-term data, investors can know [how volatile a stock will be](https:\/\/www.fool.com\/investing\/stock-market\/types-of-stocks\/volatile-stocks\/) over the course of a year just by using the data. In this case, I will illustrate the concept by examining the monthly returns on two U.S.-listed stocks.\n\n## Annualized volatility formula\nBut first, here's a look at the formula for [calculating annualized volatility](https:\/\/www.fool.com\/investing\/how-to-invest\/stocks\/how-to-calculate-stock-volatility\/).\n\n- Annualized volatility = standard deviation (volatility) multiplied by the square root of the periods in the year.\n\nFor example, you might calculate the volatility of daily stock returns. Since there are roughly 252 trading days in the year, you multiply the square root of 252 (15.9) by the daily volatility to get the annualized volatility. (We'll use monthly returns in the case below, so the time period will be 12 times a year.)\n\n## Calculating a stock's volatility\nThe chart below shows the monthly returns for two stocks. Just from the chart's appearance, Stock A is more volatile than Stock B, but this needs to be expressed mathematically.\n\n![Chart showing monthly returns for two stocks.](https:\/\/m.foolcdn.com\/media\/dubs\/original_images\/Monthly_Returns.png?_w=3840)\n\nData source: author's analysis.\n\nThe first step is to calculate the monthly volatility of each stock's return. You can easily do this using an Excel spreadsheet and calculating the standard deviation (stdev function) of the 12 monthly returns for each [stock](), as shown in the chart above.\n\nDoing this gives a monthly standard deviation (volatility) of 17.9% for Stock A and just 3.6% for Stock B. This confirms the optics in the chart. In other words, Stock A is a more volatile -- and, some might say, riskier -- investment than Stock B.\n\n## Annualizing volatility\nReturning to the formula for annualized volatility, the figures above are monthly returns. There are 12 months in the year, so the annualized volatility is calculated by multiplying the square root of 12 by the monthly volatility. Here's how we calculate annualized volatility for the two stocks:\n\n- Stock A annualized volatility = 17.9% multiplied by the square root of 12, resulting in 62%\n- Stock B annualized volatility = 3.6% multiplied by the square root of 12, resulting in 12.5%\n\nWe can see that Stock A is notably more volatile than Stock B, which might be a factor to consider when [investing in stocks](https:\/\/www.fool.com\/investing\/how-to-invest\/stocks\/).\n\n## The bottom line on calculating annualized volatility\nIt's important to remember that annualized volatility is just one of many tools investors must consider. The history of investing is full of [investment strategies]() that demonstrated low volatility and good returns -- right before they blew up in an investor's face.\n\nIn addition, the data is always historical, and there's no guarantee that stock returns will follow historical patterns. The assumption that volatility or standard deviation is equivalent to risk is also an open question.\n\n## Related investing topics\n\nFor example, going back to the first example above, Fund B is *seen* as riskier because its returns are more volatile than Fund A. However, the implied annual return is precisely the same at 10% for both funds. All told, volatility and annualized volatility are simply useful concepts that can serve as a starting point for thinking about [risk and reward](https:\/\/www.fool.com\/research\/gen-z-millennial-investors-risk\/) in investing.\n\nFAQ\n\n### About the Author\n![Lee Samaha](https:\/\/g.foolcdn.com\/avatar\/4552318\/large.ashx?_w=3840)\n\nLee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. Prior to The Motley Fool, Lee was a Civil Engineer and Investment Manager. He holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment. Lee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community.\n\nThe Motley Fool has a [disclosure policy](https:\/\/www.fool.com\/legal\/fool-disclosure-policy\/).","meta_canonical":null,"ml_categories_json":"{\"\/Finance\":998,\"\/Finance\/Investing\":987,\"\/Finance\/Investing\/Stocks_and_Bonds\":877}","ml_types_json":"{\"\/Article\":999,\"\/Article\/How_to\":750}","ml_intent_types_json":"{\"Informational\":999}","meta_language":"en","attrs_author":"Lee Samaha","attrs_publish_time":1746066018,"attrs_original_publish_time":1710207328,"attrs_is_republished":1,"attrs_nr_words":"1850","attrs_boilerpipe_nr_words":"931","body_ext_links_number":21,"body_int_links_number":167,"meta_nofollow":0,"meta_noarchive":0,"props_was_rendered":1,"src_redirect":"","download_time_msec":458,"download_ttfb_msec":457,"download_size":46549}

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Annualized volatility measures how much a stock price varies over one year. Many investors use volatility to define the riskiness of a stock, bond, or asset class. In addition, assumptions about volatility are used to price options . Image source: Getty Images. No investor invests without comparing risk to reward, so annualized volatility is integral to any investor's toolbox. We'll outline how to calculate volatility and provide an example to serve as a reference point for readers interested in the concept. What is volatility? The most common way to measure volatility in finance is through standard deviation. This is a mathematical expression of how much a variable can differ from its average. To help investors grasp the concept of volatility, consider investing in two funds. Fund A has returned 10% each year over the last three years. Fund B has returned 8%, 12%, and 10%. Both funds have an average yearly return of 10%, but Fund B is more volatile because its returns vary more. Using a simple Excel worksheet and the standard deviation function (stdev), you can see that Fund A's standard deviation is zero (meaning its returns don't vary around the mean). In contrast, the standard deviation for Fund B is 2%. Assuming a normal distribution -- a bell-shaped curve that assumes 68% of variables are within one standard deviation from the mean and 95% of variables are within two standard deviations -- you could argue the following for Fund B: 68% of the time, the fund will generate a return between 8% and 12%. 95% of the time, the fund will generate a return between 6% and 14%. The above example is simplified to illustrate a point. However, in the real world, investors won't always have the time or patience to wait years to calculate potential returns and volatility. That's where the idea of annualized volatility comes in. By annualizing short-term data, investors can know how volatile a stock will be over the course of a year just by using the data. In this case, I will illustrate the concept by examining the monthly returns on two U.S.-listed stocks. Annualized volatility formula But first, here's a look at the formula for calculating annualized volatility . Annualized volatility = standard deviation (volatility) multiplied by the square root of the periods in the year. For example, you might calculate the volatility of daily stock returns. Since there are roughly 252 trading days in the year, you multiply the square root of 252 (15.9) by the daily volatility to get the annualized volatility. (We'll use monthly returns in the case below, so the time period will be 12 times a year.) Calculating a stock's volatility The chart below shows the monthly returns for two stocks. Just from the chart's appearance, Stock A is more volatile than Stock B, but this needs to be expressed mathematically. Data source: author's analysis. The first step is to calculate the monthly volatility of each stock's return. You can easily do this using an Excel spreadsheet and calculating the standard deviation (stdev function) of the 12 monthly returns for each stock , as shown in the chart above. Doing this gives a monthly standard deviation (volatility) of 17.9% for Stock A and just 3.6% for Stock B. This confirms the optics in the chart. In other words, Stock A is a more volatile -- and, some might say, riskier -- investment than Stock B. Annualizing volatility Returning to the formula for annualized volatility, the figures above are monthly returns. There are 12 months in the year, so the annualized volatility is calculated by multiplying the square root of 12 by the monthly volatility. Here's how we calculate annualized volatility for the two stocks: Stock A annualized volatility = 17.9% multiplied by the square root of 12, resulting in 62% Stock B annualized volatility = 3.6% multiplied by the square root of 12, resulting in 12.5% We can see that Stock A is notably more volatile than Stock B, which might be a factor to consider when investing in stocks . The bottom line on calculating annualized volatility It's important to remember that annualized volatility is just one of many tools investors must consider. The history of investing is full of investment strategies that demonstrated low volatility and good returns -- right before they blew up in an investor's face. In addition, the data is always historical, and there's no guarantee that stock returns will follow historical patterns. The assumption that volatility or standard deviation is equivalent to risk is also an open question. Related investing topics For example, going back to the first example above, Fund B is seen as riskier because its returns are more volatile than Fund A. However, the implied annual return is precisely the same at 10% for both funds. All told, volatility and annualized volatility are simply useful concepts that can serve as a starting point for thinking about risk and reward in investing. FAQ About the Author Lee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. Prior to The Motley Fool, Lee was a Civil Engineer and Investment Manager. He holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment. Lee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community. The Motley Fool has a disclosure policy .

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Annualized Volatility # How to Calculate Annualized Volatility By [Lee Samaha](https://www.fool.com/author/2492/) – Updated Apr 30, 2025 at 10:20 PM EST [Follow us](https://profile.google.com/cp/CgkvbS8wNTc4bWs) Share ## Key Points - Annualized volatility is calculated as standard deviation times square root of periods. - High annualized volatility indicates greater price variability and potential risk. - Investors use annualized volatility to compare risk and make informed choices. - [What is volatility?](https://www.fool.com/investing/how-to-calculate/annualized-volatility/#toc_what-is-volatility) - [Annualized volatility formula](https://www.fool.com/investing/how-to-calculate/annualized-volatility/#toc_annualized-volatility-formula) - [Calculating volatility](https://www.fool.com/investing/how-to-calculate/annualized-volatility/#toc_calculating-volatility) - [Annualizing volatility](https://www.fool.com/investing/how-to-calculate/annualized-volatility/#toc_annualizing-volatility) - [FAQ](https://www.fool.com/investing/how-to-calculate/annualized-volatility/#toc_faq) Annualized volatility measures how much a stock price varies over one year. Many investors use volatility to define the riskiness of a stock, bond, or asset class. In addition, assumptions about volatility are used to price [options](https://www.fool.com/terms/o/options/). ![Yellow road sign warning Volatility Ahead against backdrop of beautiful blue sky.](https://m.foolcdn.com/media/dubs/original_images/Slide_14_-__yellow_road_sign_warning_volatility_ahead_against_backdrop_of_.jpg?_w=3840) Image source: Getty Images. No investor invests without comparing risk to reward, so annualized volatility is integral to any investor's toolbox. We'll outline how to calculate volatility and provide an example to serve as a reference point for readers interested in the concept. ## What is volatility? The most common way to [measure volatility in finance](https://www.fool.com/terms/s/stock-market-volatility/) is through standard deviation. This is a mathematical expression of how much a variable can differ from its average. To help investors grasp the concept of volatility, consider investing in two funds. Fund A has returned 10% each year over the last three years. Fund B has returned 8%, 12%, and 10%. Both funds have an average [yearly return](https://www.fool.com/investing/how-to-invest/stocks/how-to-convert-daily-returns-to-annual-returns/) of 10%, but Fund B is more volatile because its returns vary more. Using a simple Excel worksheet and the standard deviation function (stdev), you can see that Fund A's standard deviation is zero (meaning its returns don't vary around the mean). In contrast, the standard deviation for Fund B is 2%. Assuming a normal distribution -- a bell-shaped curve that assumes 68% of variables are within one standard deviation from the mean and 95% of variables are within two standard deviations -- you could argue the following for Fund B: - 68% of the time, the fund will generate a return between 8% and 12%. - 95% of the time, the fund will generate a return between 6% and 14%. The above example is simplified to illustrate a point. However, in the real world, investors won't always have the time or patience to wait years to calculate potential returns and volatility. That's where the idea of annualized volatility comes in. By annualizing short-term data, investors can know [how volatile a stock will be](https://www.fool.com/investing/stock-market/types-of-stocks/volatile-stocks/) over the course of a year just by using the data. In this case, I will illustrate the concept by examining the monthly returns on two U.S.-listed stocks. ## Annualized volatility formula But first, here's a look at the formula for [calculating annualized volatility](https://www.fool.com/investing/how-to-invest/stocks/how-to-calculate-stock-volatility/). - Annualized volatility = standard deviation (volatility) multiplied by the square root of the periods in the year. For example, you might calculate the volatility of daily stock returns. Since there are roughly 252 trading days in the year, you multiply the square root of 252 (15.9) by the daily volatility to get the annualized volatility. (We'll use monthly returns in the case below, so the time period will be 12 times a year.) ## Calculating a stock's volatility The chart below shows the monthly returns for two stocks. Just from the chart's appearance, Stock A is more volatile than Stock B, but this needs to be expressed mathematically. ![Chart showing monthly returns for two stocks.](https://m.foolcdn.com/media/dubs/original_images/Monthly_Returns.png?_w=3840) Data source: author's analysis. The first step is to calculate the monthly volatility of each stock's return. You can easily do this using an Excel spreadsheet and calculating the standard deviation (stdev function) of the 12 monthly returns for each [stock](), as shown in the chart above. Doing this gives a monthly standard deviation (volatility) of 17.9% for Stock A and just 3.6% for Stock B. This confirms the optics in the chart. In other words, Stock A is a more volatile -- and, some might say, riskier -- investment than Stock B. ## Annualizing volatility Returning to the formula for annualized volatility, the figures above are monthly returns. There are 12 months in the year, so the annualized volatility is calculated by multiplying the square root of 12 by the monthly volatility. Here's how we calculate annualized volatility for the two stocks: - Stock A annualized volatility = 17.9% multiplied by the square root of 12, resulting in 62% - Stock B annualized volatility = 3.6% multiplied by the square root of 12, resulting in 12.5% We can see that Stock A is notably more volatile than Stock B, which might be a factor to consider when [investing in stocks](https://www.fool.com/investing/how-to-invest/stocks/). ## The bottom line on calculating annualized volatility It's important to remember that annualized volatility is just one of many tools investors must consider. The history of investing is full of [investment strategies]() that demonstrated low volatility and good returns -- right before they blew up in an investor's face. In addition, the data is always historical, and there's no guarantee that stock returns will follow historical patterns. The assumption that volatility or standard deviation is equivalent to risk is also an open question. ## Related investing topics [How to Calculate the Net Worth on Financial StatementsThe net worth of a business is also known as its book value or its owners' (stockholders') equity.](https://www.fool.com/investing/how-to-calculate/net-worth-on-financial-statements/) [How to Calculate the Present Value of Free Cash FlowHere's an explanation and simple example of how to calculate the present value of free cash flow.](https://www.fool.com/investing/how-to-calculate/present-value-of-free-cash-flow/) [How to Calculate the Percentage of Annual DeclineHere's what you need to know to calculate annual decline over any time period.](https://www.fool.com/investing/how-to-calculate/percentage-of-annual-decline/) [Here's How to Calculate Future Expected Stock PriceCalculating the future expected stock price can be useful, but no single equation can be used universally.](https://www.fool.com/investing/how-to-invest/stocks/how-to-calculate-future-stock-price/) For example, going back to the first example above, Fund B is *seen* as riskier because its returns are more volatile than Fund A. However, the implied annual return is precisely the same at 10% for both funds. All told, volatility and annualized volatility are simply useful concepts that can serve as a starting point for thinking about [risk and reward](https://www.fool.com/research/gen-z-millennial-investors-risk/) in investing. ## FAQ ## How to calculate annualized volatility: FAQ ### What is the formula for annualized volatility? ### How is volatility calculated? ### What is annualized volatility used for? ### About the Author ![Lee Samaha](https://g.foolcdn.com/avatar/4552318/large.ashx?_w=3840) Lee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. Prior to The Motley Fool, Lee was a Civil Engineer and Investment Manager. He holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment. Lee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community. [TMFSaintGermain](https://www.fool.com/author/2492/) [@LeeSamaha](https://x.com/LeeSamaha) The Motley Fool has a [disclosure policy](https://www.fool.com/legal/fool-disclosure-policy/). ## Read Next [How to Calculate Net Change in Cash From a Cash Flow Statement](https://www.fool.com/investing/how-to-calculate/net-change-in-cash/) [How to Calculate Accrued Interest](https://www.fool.com/investing/how-to-calculate/accrued-interest/) [How to Calculate Semi-Annual Bond Yield](https://www.fool.com/investing/how-to-calculate/semi-annual-bond-yield/) [How to Calculate a Monthly Return on Investment](https://www.fool.com/investing/how-to-calculate/monthly-return-on-investment/) [How to Calculate the Number of Shares a Company Has](https://www.fool.com/investing/how-to-calculate/shares-a-company-has/) [How to Calculate the Price of a Treasury Bill](https://www.fool.com/investing/how-to-calculate/price-of-treasury-bills/) ## Premium Investing Services Invest better with The Motley Fool. 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Annualized volatility measures how much a stock price varies over one year. Many investors use volatility to define the riskiness of a stock, bond, or asset class. In addition, assumptions about volatility are used to price [options](https://www.fool.com/terms/o/options/). ![Yellow road sign warning Volatility Ahead against backdrop of beautiful blue sky.](https://m.foolcdn.com/media/dubs/original_images/Slide_14_-__yellow_road_sign_warning_volatility_ahead_against_backdrop_of_.jpg?_w=3840) Image source: Getty Images. No investor invests without comparing risk to reward, so annualized volatility is integral to any investor's toolbox. We'll outline how to calculate volatility and provide an example to serve as a reference point for readers interested in the concept. ## What is volatility? The most common way to [measure volatility in finance](https://www.fool.com/terms/s/stock-market-volatility/) is through standard deviation. This is a mathematical expression of how much a variable can differ from its average. To help investors grasp the concept of volatility, consider investing in two funds. Fund A has returned 10% each year over the last three years. Fund B has returned 8%, 12%, and 10%. Both funds have an average [yearly return](https://www.fool.com/investing/how-to-invest/stocks/how-to-convert-daily-returns-to-annual-returns/) of 10%, but Fund B is more volatile because its returns vary more. Using a simple Excel worksheet and the standard deviation function (stdev), you can see that Fund A's standard deviation is zero (meaning its returns don't vary around the mean). In contrast, the standard deviation for Fund B is 2%. Assuming a normal distribution -- a bell-shaped curve that assumes 68% of variables are within one standard deviation from the mean and 95% of variables are within two standard deviations -- you could argue the following for Fund B: - 68% of the time, the fund will generate a return between 8% and 12%. - 95% of the time, the fund will generate a return between 6% and 14%. The above example is simplified to illustrate a point. However, in the real world, investors won't always have the time or patience to wait years to calculate potential returns and volatility. That's where the idea of annualized volatility comes in. By annualizing short-term data, investors can know [how volatile a stock will be](https://www.fool.com/investing/stock-market/types-of-stocks/volatile-stocks/) over the course of a year just by using the data. In this case, I will illustrate the concept by examining the monthly returns on two U.S.-listed stocks. ## Annualized volatility formula But first, here's a look at the formula for [calculating annualized volatility](https://www.fool.com/investing/how-to-invest/stocks/how-to-calculate-stock-volatility/). - Annualized volatility = standard deviation (volatility) multiplied by the square root of the periods in the year. For example, you might calculate the volatility of daily stock returns. Since there are roughly 252 trading days in the year, you multiply the square root of 252 (15.9) by the daily volatility to get the annualized volatility. (We'll use monthly returns in the case below, so the time period will be 12 times a year.) ## Calculating a stock's volatility The chart below shows the monthly returns for two stocks. Just from the chart's appearance, Stock A is more volatile than Stock B, but this needs to be expressed mathematically. ![Chart showing monthly returns for two stocks.](https://m.foolcdn.com/media/dubs/original_images/Monthly_Returns.png?_w=3840) Data source: author's analysis. The first step is to calculate the monthly volatility of each stock's return. You can easily do this using an Excel spreadsheet and calculating the standard deviation (stdev function) of the 12 monthly returns for each [stock](), as shown in the chart above. Doing this gives a monthly standard deviation (volatility) of 17.9% for Stock A and just 3.6% for Stock B. This confirms the optics in the chart. In other words, Stock A is a more volatile -- and, some might say, riskier -- investment than Stock B. ## Annualizing volatility Returning to the formula for annualized volatility, the figures above are monthly returns. There are 12 months in the year, so the annualized volatility is calculated by multiplying the square root of 12 by the monthly volatility. Here's how we calculate annualized volatility for the two stocks: - Stock A annualized volatility = 17.9% multiplied by the square root of 12, resulting in 62% - Stock B annualized volatility = 3.6% multiplied by the square root of 12, resulting in 12.5% We can see that Stock A is notably more volatile than Stock B, which might be a factor to consider when [investing in stocks](https://www.fool.com/investing/how-to-invest/stocks/). ## The bottom line on calculating annualized volatility It's important to remember that annualized volatility is just one of many tools investors must consider. The history of investing is full of [investment strategies]() that demonstrated low volatility and good returns -- right before they blew up in an investor's face. In addition, the data is always historical, and there's no guarantee that stock returns will follow historical patterns. The assumption that volatility or standard deviation is equivalent to risk is also an open question. ## Related investing topics For example, going back to the first example above, Fund B is *seen* as riskier because its returns are more volatile than Fund A. However, the implied annual return is precisely the same at 10% for both funds. All told, volatility and annualized volatility are simply useful concepts that can serve as a starting point for thinking about [risk and reward](https://www.fool.com/research/gen-z-millennial-investors-risk/) in investing. FAQ ### About the Author ![Lee Samaha](https://g.foolcdn.com/avatar/4552318/large.ashx?_w=3840) Lee Samaha is a contributing Stock Market Analyst at The Motley Fool covering industrials, electricals, energy, materials, transportation, and infrastructure stocks. Prior to The Motley Fool, Lee was a Civil Engineer and Investment Manager. He holds a Bachelor of Civil and Structural Engineering from Southampton University and a Certificate in Investment Management from Chartered Institute for Securities & Investment. Lee first cut his investing teeth on The Motley Fool bulletin boards (commonly referred to as the “Fool Boards,”) and he’s infinitely grateful to all of the investors he learned from in this powerful investing community. The Motley Fool has a [disclosure policy](https://www.fool.com/legal/fool-disclosure-policy/).

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