🔃Volatility

Volatility implies the difference between the actual portfolio return to the expected return (or mean value). Our volatility index is calculated with the 95% confidence level, or 2 standard deviations. We convert data into percentages shown below.

$$SD\_Percent = \frac{SD\_Return}{\lvert EXP\_Return \lvert} \times 100$$

$$Volatility =2 \times \sum_{p=1}^N \big(w_p \times SD\_Percent_p\big)$$

$$Volatility\_level =\begin{cases} \frac{Volatility}{10} + 1 & ,Volatility \leq 10 \\\frac{Volatility - 10}{10} + 2 & ,Volatility \leq 20 \\\frac{Volatility - 20}{10} + 3 & ,Volatility \leq 30 \\\frac{Volatility - 30}{20} + 4 & ,Volatility \leq 50 \\\frac{Volatility - 50}{20} + 5 & ,Volatility \leq 70 \\\frac{Volatility - 70}{30} + 6 & ,Volatility \leq 100 \\ \big(\frac{Volatility - 100}{900} \times 3\big) + 7 & ,Volatility > 100 \end{cases}$$

Level	Percentages	Risk Description
1	0-10%	Very low volatility risk
2	10.1-20%	Low volatility risk
3	20.1-30%	Relatively low volatility risk
4	30.1-50%	Medium volatility risk
5	50.1-70%	High volatility risk
6	70.1-100%	Very high volatility risk
7	100.1-1,000%	Extra high volatility risk