Volatility shows how much the price deviates from its average value. The larger the range of fluctuations, the higher the volatility and the less predictable the investment outcome over a short horizon.
The indicator is symmetric: it accounts for both declines and growth. An asset that has sharply increased is formally as volatile as one that has sharply decreased, although investors perceive these events differently. This is why volatility is not a synonym for loss, but a measure of uncertainty.
When interpreting, it is important to consider liquidity. For securities with infrequent trades, calculated volatility is understated: the price does not change simply because there are no trades, creating an illusion of stability. In the Uzbek market, where liquidity is unevenly distributed, low calculated volatility of individual stocks reflects the absence of transactions rather than price stability.