Volatility measurement is a cornerstone of quantitative finance, providing essential insights into the risk characteristics of financial assets and portfolios. Volatility represents the degree of variation in asset prices over time, serving as a primary indicator of investment risk and uncertainty.

Various volatility measures serve different purposes in risk management and portfolio optimization. From simple historical volatility to sophisticated realized volatility and implied volatility models, each measure offers unique perspectives on market dynamics and risk assessment.

Understanding and accurately measuring volatility is crucial for portfolio managers, risk analysts, and algorithmic traders. These measurements inform critical decisions about position sizing, hedging strategies, and risk management protocols, directly impacting investment performance and capital preservation.