How-to: Company Pages
How to: Discovery
How-to: Portfolio Holdings
How to: Activity
How to: Leaderboard
How to: Performance
How to: Challenges
How to Trade
How to: use EquitySim to improve your recruitment potential
Fixing Account Errors
My Trade is not being processed
An investment in my portfolio is showing up as $0
Stock splits, mergers + acquisitions
I can't find a specific investment
I can't sign-up
My credit card is being declined
Designing a stand-out resume
Showcasing your work on EquitySim
Preparing for the Sales + Trading Interview
Adding structure to your interview answers
2021 Credit-Suisse Investment Challenge
Case Study: 2019 Credit-Suisse Results
What is a Stock?
How to Choose a Stock
Active Trading vs Portfolio Management
How to start testing multiple strategies
What is an ETF?
How to Choose ETFs
What is short selling?
What is a Bond?
What is an Option?
What is Portfolio Management Strategy?
What is Diversification?
What is the Diversification Score?
How to Build a Basic ETF Portfolio
What are asset-classes?
What is Industry Exposure?
What is Geopolitical Exposure?
How to read impact on diversification
What is Volatility?
What is Return?
What is Sharpe Ratio?
How to Improve Sharpe Ratio
How do I measure risk?
What are average excess returns?
What is a good Sharpe Ratio?
Host your own EquitySim Challenge
Can users share an account?
How do I export classroom data?
How do I delete, archive and edit my class?
Challenge Setting Types
How does EquitySim compare to other simulations?
What are Trading Strategies?
What are some basic Financial Vocabulary?
Recording your Strategies and Rationales
What is EquitySim?
Can I undo a trade?
How are prices determined in the simulation?
Why didn't my trade execute immediately?
How do I exchange currency?
Why isn't my ranking showing up?
What are Public Portfolios?
How do I switch between portfolios?
How am I Graded?
Does EquitySim have sample assignments for my curriculum?
How are Options priced in the simulation?
How do I find my daily portfolio change?
How do the Portfolio Emails Work?
Is my data confidential?
How do I delete my account?
How our simulations reflect the real-world
What can I trade on EquitySim?
What is a good rationale?
How to set-up your team
What are the different order types?
Which government bonds can I trade?
Volatility measures how much the returns of your portfolio fluctuate on a daily basis. You want to try to minimize the volatility of your portfolio to demonstrate you can make consistent returns.
Note: In EquitySim Challenges -> your goal is to keep your volatility as close to 1% as possible.
The Math Behind Volatility
At the end of each day, we log that day's returns and compare them to all of your other day's returns. The more these numbers vary the higher your volatility is.
Volatility is calculated by taking the Standard Deviation of your daily returns.
Day 1 returns: 1%
Day 2 return: 3%
Day 3 returns: -3%
Day 4 returns: 0.50%
Day 5 returns: -2%
You can use Excel or Google sheets to calculate the Standard deviation of this set of numbers.
Standard Deviation of (1%,3%,-3%,0.5%,-2%) = Volatility = 2.41%
What is Standard Deviation?
Standard deviation measures the amount of variation in a set of values, (in volatility these values are your daily return rates).
Standard Deviation will take all of your daily return rates as inputs, and determine 3 buckets of variation. Each variation bucket is known as a standard deviation, notated with the symbol "sigma": σ.
Each bucket is named 1σ, 2σ, 3σ. On the spectrum, the middle is your mean (average).
The curve fits all your data points, the wider the range, the higher the volatility.
If σ = 1.5% , and the mean (average) is = 0.5% ; +1σ = 2% and -1σ = -1%.
This means approximately 68.2% of the time your daily returns are between -1% and +2%.
Tips to Keep in Mind:
Tip#1. You don't need to thoroughly understand the math to minimize your volatility, but learning basic statistics through a few Youtube videos will give you a clearer understanding of visualizing volatility.
Tip#2. Volatility is about generating consistent returns every day. Set reasonable return goals that you can achieve think you can achieve every day.
Tip#3. Create rules of when to sell, and stay disciplined. If you can manage the upper bound and lower bound of your returns, you can manage your volatility.