Interpretation of Annualized Volatility:

Volatility measures how much an asset's price fluctuates over a period. A higher volatility percentage indicates a greater degree of price dispersion, meaning the asset's price is more likely to deviate significantly from its average. Conversely, lower volatility suggests a more stable price.

For example, an annualized volatility of 20% implies that, over a year, you can expect the asset's price to move up or down by about 20% from its average in approximately two-thirds of all cases (assuming a normal distribution).

Investors often associate higher volatility with higher risk, as it implies greater uncertainty regarding future returns. However, it can also present opportunities for higher returns for those willing to take on more risk.