Volatility Analysis of Large Capitalization Companies and S&P 500 Index

Running head: VOLATILITY ANALYSIS
Volatility Analysis
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VOLATILITY ANALYSIS1
Executive Summary:
Volatility in the stocks is one of the most important part of any stock market analyst. As it
analyses the reason for the volatility and highlights any such volatility which might occur in
the future due to the reason. The report focuses on evaluating the volatility of three large
capitalization company of the S&P 500. The company being the Microsoft Corporation,
Apple Inc and Amazon Corporation. The stock prices of these company are taken for a 10
day period and volatility is measured. The reason are also determined for the volatility. The
S&P 500 index is also analysed and its volatility calculated and evaluated with the current
period and historical period of September 2008. Thus relevant conclusion and reason are
highlighted at the end of the report regarding volatility of these stocks and index.

VOLATILITY ANALYSIS2
Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Volatility of the Stocks:.........................................................................................................3
Volatility of the Index:...........................................................................................................5
Comparison of Volatility:......................................................................................................7
Conclusion:................................................................................................................................9
References and Bibliographies:................................................................................................10

VOLATILITY ANALYSIS3
Introduction:
The analysis of the volatility of the prices of large capitalization company is done to
evaluate how much a particular news or event has affected the price of a company. Thus the
changes in the volatility of the prices of the stock of a company helps analyst determine the
trend of the stock when there are expectation of any such news in future. The analysis is
conducted on three S&P 500 company. Microsoft Corporation, Apple Inc, and Amazon
Corporation. The benchmark is the index S&P 500, for the analysis purpose. The report aims
to highlight the volatility of the respective stocks and the index (Fadel & Al-Ajmi, 2018).
Discussion:
Volatility of the Stocks:
The volatility of the stocks of the three company is calculated by taking the historical
share price for the past 10 days. The holding period returns for the stocks or the daily returns
of the stock price is calculated.
Figure 1: Historical Share Price
Source: finance.yahoo.com