Calculate Negative Volatility

What is Calculate Negative Volatility and Why it Matters

Negative volatility is a statistical measure that indicates the probability of a return falling below a certain threshold…

How to Use This Calculator

1. Enter the mean return of your investment.
2. Enter the standard deviation of your investment’s returns.
3. Select your desired confidence level.
4. Click ‘Calculate’.

Formula & Methodology

The formula for calculating negative volatility is:

Negative Volatility = Mean – (Standard Deviation * Z-score)

Real-World Examples

Let’s consider three scenarios…

Data & Statistics

Historical Negative Volatility Data

Year	Mean Return	Standard Deviation	Negative Volatility (95%)
2018	12.5%	5.2%	1.6%

Expert Tips

• Always use the most recent data available.
• Consider using a higher confidence level for critical decisions.

Interactive FAQ

What is the difference between negative and positive volatility?

Negative volatility indicates the likelihood of a return falling below a certain threshold, while positive volatility indicates the likelihood of a return exceeding a certain threshold.

For more information, see the BLS Handbook of Methods and the NBER guide on volatility.