How to compute annualized volatility

[duffman]

Hello -

I have a series of daily returns of a fixed income instrument. How would I compute it's annualized volatility?

I can use excel. Assume that the daily returns are in A1:A756 (~ 3 years of data). Is it just stdev(a1:a756) * sqrt(252)? More generically if I have a data set of n items what would it's annualized volatility be? I think that the multiplication with sqrt(252) should depend on the number of items in my data set but I'm not sure how to proceed..

Any help would be much appreciated.

Thanks!

 

[tkhunny]

You'll have to define "Volatility". Is it the difference of succcessive values? Is it different for one, two, or three days? How do youcalculate it and how do you annualize this calculation? Please stop guessing. You will only become more and more frustrated.