Market Volatility
Last updated
Last updated
Market volatility is a method to measure the deviation from the average price in a specific set period. The greater the deviation is, the higher the market volatility is.
You may need to assess the volatility of the current trading pair when providing liquidity and setting price range.
Note: Market volatility does not indicate the direction of price change, but only the degree of price volatility. Volatility is mainly used as a risk indicator, though there are other reasons attention. Increasing volatility brings greater risk and uncertainty, and vice versa.
Multiple Protocol offers a detailed market volatility chart, which can be used by LPs as an indicator of risk control.
The market volatility offered by Multiple Protocol is the historical volatility (Backward lLoking)
Definition:
((Observation frequency)) (The price of the variable at the end of the i time interval, i = 0, 1,..., n) (The event interval is measured in year)
Formula 1: Rate of yield (continuously compounded rate of return)
Formula 2:：The standard deviation s of
Formula 3: Backward lLoking