sentences:  Volatility is a statistical measure of dispersion around the average of any random variable such as market parameters etc.For any fund that evolves randomly with time, volatility is defined as the standard deviation of a sequence of random variables, each of which is the return of the fund over some corresponding sequence of (equally sized) times.Thus, "annualized" volatility "σ"annually is the standard deviation of an instrument's yearly logarithmic returns.