Question

how to Calculate monthly stock return volatility and monthly turnover ?

How return volatility is associated with turnover? Suppose in early January 2018 you start investing in one (and only one) of the two stocks and sell in 3 months, which stock you choose?

Answer 1

The return for any given month equals the last trading price for the last business day of the month, divided by the last trading price for the previous month, minus one. Assume, for instance, that you wish to calculate the return for April and the last business day in April was April 29, while the last trading day of the prior month was March 31. Divide the closing price of April 29 by the closing price of March 31 and subtract 1 from the result. Do this for every month in the time range.

Extensive research shows that for both individual stocks, and for market indices, volatility is positively correlated with trading volume or turnover. This correlation could arise from private information being impounded in prices through trading. It could also occur if investors re-weighted their portfolios in response to price changes. Finally, the correlation between volatility and trading could in part be mechanical. A price movement could trigger standing limit orders or stop-loss orders that would otherwise go unexecuted.

Suppose in early January 2018 you start investing in one (and only one) of the two stocks and sell in 3 months, which stock you choose? Did not understood what it meant, please reach on comments section