Stochastic volatility

Stochastic volatility is a type of mathematical model used to measure how much change, or volatility, is taking place in something. For example, when you are looking at the stock market, the prices of stocks and other investments can go up and down a lot in a short amount of time. Stochastic volatility is a way to measure all of those ups and downs (the "volatility") over time. In other words, it helps you to measure how much the value of something might change from one moment to the next.