Annualized Volatility (sometimes called 'historical volatility') measures the statistical dispersion of an asset's returns — how much the price moves around its average. It is expressed as a percentage and calculated by computing the standard deviation of daily returns and scaling it to an annual figure.
Volatility is not the same as risk, but they are closely related. A highly volatile asset can deliver outstanding returns — but it also creates the emotional conditions (seeing large daily swings) that cause investors to exit positions at the worst possible time.
For context: the S&P 500 has a long-run annualized volatility of roughly 15–18%. Gold sits around 12–15%. Individual tech stocks like NVIDIA can have volatilities of 45–60%. Bonds and short-term instruments typically have volatilities below 5%.
On StressTest.pro, annualized volatility is computed from the full 10-year daily return series using the standard 252-trading-days convention. The 'Estimated Vol' shown on the Risk X-Ray matrix is a forward-looking model estimate derived from factor exposures, which may differ slightly from historical realized volatility.