Knowledge is power. We empower our clients.

Get Started Now
<< Back to Financial Glossary

What is Volatility?

All securities such as stocks, bonds or mutual funds, experience daily price movements. Volatility is the rate and degree at which a security’s price fluctuates.

Importantly, volatility does not take the direction of a price movement into account, just the degree of variation of the asset’s price. Therefore, if volatility is said to be high, then a security’s price moves up and down frequently over short periods of time. Likewise, low volatility represents little movement in a security’s price over time.

There are multiple ways to measure volatility to gauge the relative risk of a particular security compared to another security or the overall market. In addition, investors can measure the volatility not only of the individual security, but also their entire portfolio and the overall market. Different calculations include standard deviation, beta, alpha and Sharpe ratio.

Jemma Everyday Wisdom: Securities that experience a high level of volatility are not necessarily “bad” investments. Rather, it’s much more important to consider your short-term and long-term financial goals, your investment time frame, and your ability to tolerate the up and down movements (i.e. your risk tolerance) of the security before investing.

Log In to Your Existing Account Get Started Now

Need assistance? Call 855.662.2121 or email

You are now leaving Jemma Financial

Yes, I would like to leave No, I would like to stay

Important Notice

You are now leaving the Jemma Financial Services website and will be entering the Charles Schwab & Co., Inc. (“Schwab”) website.

Schwab is a registered broker-dealer, and is not affiliated with Jemma Financial Services or any advisor(s) whose name(s) appear(s) on this website. Jemma Financial Services is/are independently owned and operated. [Schwab neither endorses nor recommends {Name(s) of Investment Management Firm(s)}, unless you have been referred to us through the Schwab Advisor Network®. (This bracketed language is for use by Schwab Advisor Network members only.)] Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with “Name(s) of Firm(s)” under which Schwab provides Jemma Financial Services with services related to your account. Schwab does not review the Jemma Financial Services website(s), and makes no representation regarding information contained in the Jemma Financial Services website, which should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.