Volatility and Beta

Volatility and Beta are two different values that help you to measure the movement of a market's price.

Volatility

Volatility refers to the degree of price movement. Low volatility is little movement in price, and generally indicates a quiet non-trending market. High volatility is identified by quick and substantial price movements, and is usually indicative of an active trending market. Knowing a market's volatility level can assist you in determining where the price of that market may go, whether a trend is beginning, ending, slowing, or changing direction. Volatility is generally used in technical analysis and can be determined using several technical indicators offered by TradeStation, for example, Volatility, Extreme Value Volatility, and Standard Deviation Volatility indicators.

Beta

Beta, most commonly a value calculated for stocks, measures the percentage change in a stock price relative to the percentage change of a related market index. The S&P 500 Index is generally used as the market index. For example, if a stock has a beta of 1.60, that stock can be expected to move up or down by as much as 60% more than the market index by which it is measured. Conversely, if a stock has a beta of only .80, the stock price is expected to move 20% less than the market index.