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Volatility Index vs Constituents

Volatility Index vs Constituents

Released Friday, 27th January 2023
Good episode? Give it some love!
Volatility Index vs Constituents

Volatility Index vs Constituents

Volatility Index vs Constituents

Volatility Index vs Constituents

Friday, 27th January 2023
Good episode? Give it some love!
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An index is a fund composed of a collection of stocks; naturally, the volatility of those stocks increases the volatility of the fund. Often however, the constituents will move in different directions, resulting in lower index volatility. By paying attention to the ratio between index and constituent volatility, we can observe the market's opinion about the correlations amongst the constituents. Today, Tom and Tony see what this lens can tell us about recent market history.

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