Realized Volatility (RV) Formula = √ Realized Variance
Realized volatility is annualized by multiplying daily realized variance with a number of trading days/weeks/ months in a year. The square root of the annualized realized variance is the realized volatility.
How do you calculate realized volatility in Excel?
Volatility is inherently related to standard deviation, or the degree to which prices differ from their mean. In cell C13, enter the formula "=STDEV. S(C3:C12)" to compute the standard deviation for the period.
Is realized volatility the same as historical volatility?
Realized volatility is calculated from underlying price changes over a certain period (exact calculation explained here). If this certain period is in the past, we call it historical volatility. If it is in the future, we call it future realized volatility.
