The Volatility Tool is supported by Edge, Internet Explorer 9 (or later) and the latest versions of Firefox, Chrome, Safari or Opera.
To see the volatility saving by using the WOCU compared to another currency pair; select….
Currency 1 for example the currency of your trading partner (or USD if transaction is denominated in USD)
Currency 2 for example your currency
Start Date default is 1 January, 2000 (adjustable)
End Date default is the last day of the previous month (adjustable)
Click the Submit button. Numerical results are shown in the top box:
(1) The volatility of Currency 1 vs. Currency 2 over the period
(2) The volatility of the WOCU vs. Currency 2 over the period
(3) The WOCU reduction factor is expressed as a percentage: how much volatility would have been reduced by using the WOCU
The chart shows historical exchange rates (base lined to a starting value of 1)
The red line shows Currency 1 vs. Currency 2 exchange rate
The green line shows WOCU vs. Currency 2 exchange rate
By trading with your partner via the WOCU, you can both simply eliminate a great deal of volatility, reducing risk to both parties and leading to easier and more reliable forecasting of future costs and/or revenues. You can read more on this in our White Papers and Case Studies section.
The volatility calculation over the period selected is based on the standard deviation, being the square root of the average squared deviation of the data from its mean.