Volatility measures how much a stock's price fluctuates up and down over time. High volatility means the price swings dramatically, while low volatility means the price stays relatively stable. Volatility is often used to measure risk, since larger price swings create more uncertainty.
Stock A might gain or lose 5 percent in a single day regularly, showing high volatility. Stock B might move only 0.5 percent per day on average, showing low volatility. An investor in Stock A faces more unpredictable swings in their investment's value.
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