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## Annualized Log Return Volatility

Volatility $\sigma$ can be computed from log return $l_i = \ln(S_{i+1}) - \ln(S_i)$ using the formula:

$$\sigma^2 = \frac{1}{n} \sum_{i=1}^n (l_i - l)^2 \sqrt{N}$$ where $N$ is the number of return periods per year, and $l$ is the average log return $l = \frac{1}{n} \sum_{i=1}^n l_i$.