# Is Volatility the Same as Variance?

## Is Volatility Variance? Are They the Same Thing?

Sometimes (very rarely) they may be considered the same.

They are definitely closely related.

But…

Volatility (at least in finance) is usually understood as standard deviation rather than variance.

## Volatility and Standard Deviation

Standard deviation is one of the ways how to calculate and interpret volatility of securities and investment returns.

One of the ways – not the only way – although it is by far the most popular way (used especially, but not only, for anything related to option trading).

Besides standard deviation, there are other methods how to calculate and interpret volatility. Some are just slight modifications of the standard deviation approach (for example non-centered historical volatility), while others are completely different concepts (for example range or average true range).

One of these alternative methods is variance, but its use as a measure of volatility is much less frequent than the use of standard deviation, at least for the average investor (it can be more useful in more complex quantitative finance).

Here you can see more details: Is Volatility and Standard Deviation the Same?

## Variance and Standard Deviation

The relationship between variance and standard deviation is very close and very simple:

Standard deviation is the square root of variance.

Variance is standard deviation squared.

You can see the calculation of both variance and standard deviation explained here:

Calculating Variance and Standard Deviation in 4 Easy Steps

## Related pages

vix tracking etfcontango vs backwardationhistorical volatility datathe black scholes merton modeloption rhofixed income arbitrage examplefree black scholes calculatorfinding standard deviation on calculatorblack sholes calculatorfinding variance in excelformula for calculating skewnessgeometric mean negative numbersblack scholes formula for call optiongreek calculator optionsskewness formula statisticsdow divisorstandard error of skewnesscost of debt formula waccskewness meanss&p 500 2x etfs&p 500 short etfhow to put power in excel formulanotional value of futureskurtosis valuehow to calculate the population meanleveraged etf listexcel formula to calculate rangeeuropean put option calculatorblack scholes simplifieddow jones weightingblack and scholes model formulafifo and weighted average methodmathematical formula for standard deviationhow to calculate annualized volatilitycurrency options calculatorhistorical volatility vs implied volatilitycalculating median in excelrsi meaningvix option chainshorting a call optiononline black scholes option calculatorexcel logarithmcomputational formula for variancenotional value futuresspx volatility indexhedging with vixwiki volatilityblack scholes price calculatoripath s&p 500formula for mean variance and standard deviationblack scholes formula for call optionrsi indicator settingscalculate variance on excelcboe vix indexfutures roll datescalculate exponential moving averageinterpret sharpe ratiovariance of returns calculatormarket value of debt waccproshares vixyvariance mathstheory of rational option pricingpopulation mean equationcboe tickersec 13f searchwhat is rsi in stock markethistorical volatility formulaannualize standard deviationwhat does overbought and oversold meanipath vxxyahoo market indicesskewness of distributionvariance finance formulacalculation of wacchow to create equations in excelstock option strike pricestraddle option calculatorstock price simulation excelcboe indices