It is common to calculate HV and express it graphically to make assessments on volatility priced in options (in conjunction with looking at IV). This analysis gives an idea of how volatile the stock is. *duh*
But I also want to understand how the price is "distributed".
A highly volatile stock's price behaviour may fit the normal distribution curve so applying normal distrbution assumptions will be appropriate.
On the other hand a stock may have a large number of very large unpredictable price spikes, but overall low volatility.
I have found that expressing price changes of stock in standard deviations useful to get an idea of a stocks price behaviour and see how it is distributed, as knowing that a stock is low or high volatility is not enough.
On the bottom pane, suggests the downward spikes are more common and larger than upward spikes. E.g. It would make one think twice about selling naked puts on this stock 1 standard deviation away.
Discuss?? Any alternative analysis?