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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=SD_Return∣EXP_Returnβˆ£Γ—100SD\_Percent = \frac{SD\_Return}{\lvert EXP\_Return \lvert} \times 100SD_Percent=∣EXP_Return∣SD_Return​×100
Volatility=2Γ—βˆ‘p=1N(wpΓ—SD_Percentp)Volatility =2 \times \sum_{p=1}^N \big(w_p \times SD\_Percent_p\big) Volatility=2Γ—p=1βˆ‘N​(wp​×SD_Percentp​)
Volatility_level={Volatility10+1,Volatility≀10Volatilityβˆ’1010+2,Volatility≀20Volatilityβˆ’2010+3,Volatility≀30Volatilityβˆ’3020+4,Volatility≀50Volatilityβˆ’5020+5,Volatility≀70Volatilityβˆ’7030+6,Volatility≀100(Volatilityβˆ’100900Γ—3)+7,Volatility>100Volatility\_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} Volatility_level=βŽ©βŽ¨βŽ§β€‹10Volatility​+110Volatilityβˆ’10​+210Volatilityβˆ’20​+320Volatilityβˆ’30​+420Volatilityβˆ’50​+530Volatilityβˆ’70​+6(900Volatilityβˆ’100​×3)+7​,Volatility≀10,Volatility≀20,Volatility≀30,Volatility≀50,Volatility≀70,Volatility≀100,Volatility>100​
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

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Last updated 3 years ago

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