Realized Volatility Finance
Realized Volatility: A Retrospective View of Market Fluctuations
Realized volatility (RV) is a backward-looking measure of price fluctuations, calculated using intraday price data. Unlike implied volatility, which reflects market expectations about future volatility derived from option prices, RV provides an ex-post, data-driven assessment of volatility over a specific historical period. It’s a crucial tool for risk management, trading strategy development, and academic research in finance.