Volatility as Risk: From Doppler Shifts to Market Moves
Volatility is far more than a buzzword in finance—it is a fundamental expression of uncertainty in dynamic systems. Like the Doppler effect in physics, where minute shifts in frequency produce dramatic perceptual changes, volatility captures how small fluctuations in price or behavior can rapidly escalate into systemic risk. In financial markets, volatility quantifies the instability of asset prices, reflecting the constant interplay of information, sentiment, and external shocks. Volatility as a Measure of Uncertainty At its core, volatility measures the degree of...