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I've asked two related questions. First this one on the money stack exchange and this one on the math stack exchange. But have not yet found a complete answer.

Given an index such as the S&P 500, how to I compute or locate its volatility? If I'm trying to control the risk to meet a particular level of tolerance by controlling the amount of exposure (e.g. 0.25 of assets or 1.10 of assets are invested and rebalanced periodically), would I use price or return volatility? How does a return being logarithmic or linear impact this and any adjustment to the standard deviation?

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closed as off-topic by Bob Jansen May 29 '15 at 19:21

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    $\begingroup$ I'm voting to close this question as off-topic because I'm not 100% clear what you're asking but if you're also asking about how to calculate the volatility it's too basic. $\endgroup$ – Bob Jansen May 29 '15 at 19:21
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    $\begingroup$ @BobJansen The other stack exchanges have pointed me here. So while that may seem basic, the other's won't take it, so it would seem this is the best home. $\endgroup$ – WilliamKF May 29 '15 at 19:27
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    $\begingroup$ That can be but not everything fits on these sites, also this question seems to be quite confused. This book covers some of the basics but others are probably fine as well. $\endgroup$ – Bob Jansen May 29 '15 at 19:33
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    $\begingroup$ The question on how to define volatility is not so trivial, it can be price or return volatility, returns can be log or linear, and the standard deviation may be adjusted. $\endgroup$ – emcor May 29 '15 at 21:40
  • $\begingroup$ I am also somewhat confused about what is being asked. Perhaps a look at Markowitz and Modern portfolio theory would help? $\endgroup$ – ocstl May 30 '15 at 10:36

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