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Karthik Shashidhar

Strategy Consulting | Analytics | Data Science | Market Design

Karthik Shashidhar

quadratic variation

analytics, mathematics brownian motion, markets, quadratic variation, quantitative finance

Why standard deviation is not a good measure of volatility

September 21, 2013

Most finance textbooks, at least the ones that are popular in Business Schools, use standard deviation as a measure of volatility of a stock price. In this post, we will examine why it is not a great idea. To put it in one line, the use of standard deviation loses information on the ordering of…

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