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How is volatility different from erraticness?

Volatility and erraticness are two terms that are often used in the context of financial markets, but they refer to slightly different concepts.

Volatility refers to the degree of price fluctuations in an asset or market. An asset or market is considered to be volatile if it experiences significant price movements over a short period of time. Volatility can be measured using a number of different metrics, such as the standard deviation of returns or the average true range.

Erraticness, on the other hand, refers to unpredictable or random changes in an asset or market. An asset or market is considered to be erratic if it exhibits sudden and unexpected changes in price or behavior that cannot be easily explained or predicted. Erraticness is typically a result of unexpected events or circumstances that can impact the market, such as economic shocks or major news events.

While volatility and erraticness are related, they are not the same thing. Volatility is a measure of the degree of price fluctuations in an asset or market, while erraticness refers to unpredictable or random changes in price or behavior. It’s possible for an asset or market to be volatile without being erratic, or to be erratic without being volatile.

Overall, both volatility and erraticness can have an impact on the performance of an asset or market and can affect the decision-making of traders and investors. Understanding the differences between these two concepts can help traders and investors better navigate the market and make informed trading decisions.

“Doubt is not a pleasant condition, but certainty is absurd.” – Voltaire

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