How can the empirical rule formula be used to analyze the volatility of digital currencies?

1 answers

• Mar 06, 2022 · 3 years ago
  At BYDFi, we believe that the empirical rule formula can be a valuable tool for analyzing the volatility of digital currencies. This formula provides a statistical framework for understanding the distribution of price movements and assessing the potential risks associated with investing in cryptocurrencies. By calculating the mean and standard deviation of the price data, we can determine the range within which a certain percentage of price movements are expected to fall. This range gives us an indication of the normal volatility of a digital currency. If we observe price movements outside this range, it suggests higher volatility and potentially greater risks. By using the empirical rule formula, investors can make more informed decisions and manage their risk exposure in the volatile world of digital currencies.
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