An ex-post estimate of the price or return variation, regardless of direction, over a specific period of time. In other words, it captures the volatility of an underlying using historical data. While there are various methods to calculate it, the most common method is to figure out the average deviation from the average price or return over the respective period of time. Such volatility is often compared to the implied volatility to determine if an underlying is overvalued or undervalued. The higher the realized volatility is, the riskier is the underlying asset.

It is also known as a historical volatility.