stock market volatility index chart:A Visual Analysis of Stock Market Volatility Indexes in the Global Economy

The stock market volatility index chart is a valuable tool for investors and market participants to understand and predict the potential risks and rewards in the global economy. By analyzing the movement of these indexes, we can gain insights into the overall health of the market, the potential for market crashes, and the impact of various factors on stock prices. This article will provide a visual analysis of some of the most popular stock market volatility indexes, including the CBOE Volatility Index (VIX), the FTSE FLEDGE Volatility Index, and the S&P 500 VIX Futures Index, to help readers better understand the complex relationship between volatility and market performance.

CBOE Volatility Index (VIX)

The CBOE Volatility Index, commonly known as the "Fear Index," is a benchmark for measuring the expectation of near-term market volatility. It is calculated using the average voluntary written volume of S&P 500 index options contracts with a three-month time horizon. A higher VIX reading indicates higher anticipated market volatility, while a lower reading indicates lower volatility.

Figure 1 shows the historical movement of the CBOE VIX index since 2008. The index has experienced several periods of significant volatility, including the financial crisis of 2008 and the COVID-19 pandemic of 2020. These periods of increased volatility are often accompanied by market declines and investor anxiety.

Figure 1: CBOE Volatility Index (VIX) Historical Movement

FTSE FLEDGE Volatility Index

The FTSE FLEDGE Volatility Index, also known as the FTSE FLEDGE US 0-3 Month Volatility Index, is a measure of the expected volatility of the FTSE FLEDGE US Equity Index over the next three months. The index is calculated using the daily volatilities of the FTSE FLEDGE US Equity Index and is designed to capture the volatility of smaller-cap stocks, which have been found to be more sensitive to market volatility.

Figure 2 shows the historical movement of the FTSE FLEDGE Volatility Index since 2010. Like the CBOE VIX index, the FTSE FLEDGE Volatility Index has experienced periods of significant volatility, particularly during market corrections and crises.

Figure 2: FTSE FLEDGE Volatility Index Historical Movement

S&P 500 VIX Futures Index

The S&P 500 VIX Futures Index is a market-made futures contract that measures the expected volatility of the S&P 500 index over the next three months. The index is calculated using the volatilities of S&P 500 VIX Futures contracts and is designed to capture the volatility of the broader market.

Figure 3 shows the historical movement of the S&P 500 VIX Futures Index since 2010. Like the other volatility indexes, the S&P 500 VIX Futures Index has experienced periods of significant volatility, particularly during market corrections and crises.

Figure 3: S&P 500 VIX Futures Index Historical Movement

The stock market volatility index chart provides valuable insights into the overall health of the market and the potential for market crashes. By analyzing the movement of these indexes, investors and market participants can gain a better understanding of the complex relationship between volatility and market performance. However, it is important to consider the limitations of these indexes, as they may not fully capture the complexity of market volatility and the impact of other factors on stock prices. Future research should focus on exploring the relationships between volatility indexes and other market factors, such as economic growth, interest rates, and political events, to better understand the full range of risks and opportunities in the global economy.