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Relative Volatility Indicator (RVI): complete profile for AAPL

The relative volatility indicator ranks the strength of up-day versus down-day price swings on a fixed 0-100 scale. This note sets out the method, presents the recent data, and reviews how analysts read key thresholds.

Definition and purpose

The RVI transforms the standard deviations of positive and negative returns into a bounded oscillator. Because the scale does not drift with price level, it lets observers compare volatility bias across assets and time-frames. Readings above 70 signal that rallies carry more force than declines; readings below 30 signal the reverse. The 14-period setting shown here reflects common market practice for daily charts.

Calculation steps

The indicator adopts the following form, where σ_up is the standard deviation of positive returns and σ_down the equivalent for negative returns:

RVI=100×σupσup+σdown\text{RVI}=100\times\frac{\sigma_{up}}{\sigma_{up}+\sigma_{down}}

Applied to the latest values, we substitute the current inputs:

σup=0.67σdown=0.72σtot=1.39RVI≈48.12\begin{aligned}\sigma_{up} &= 0.67 \\ \sigma_{down} &= 0.72 \\ \sigma_{tot} &= 1.39 \\ \text{RVI} &\approx 48.12\end{aligned}

14-period descriptive statistics

Observation window: 2024-08-20 to 2025-07-25. The average RVI was 48.69, with a low of 19.93 and a peak of 91.0. The inter-quartile range, at 14.439999999999998, shows how tightly the middle half of observations clustered.

Contrast with Average True Range

The Average True Range (ATR) expands and contracts with price level, which complicates cross-asset comparison. By contrast, the relative volatility indicator locks results inside predetermined bounds.

Unbounded ratios versus bounded gauges

Benchmark ratios—such as dividing an equity’s volatility by that of a broad index—offer context but lack a natural ceiling. The RVI keeps results between 0 and 100, making it easier to flag exceptional conditions.

Current reading in context

When the relative volatility indicator prints 48.12 with a four-period signal of 43.57, no early-warning or extreme bands are active. Bands mark points where volatility skews sharply in one direction and often precede a change in tone.

Positive versus negative volatility

The two lines below plot the rolling standard deviations underlying the RVI calculation.

RVI and signal line

The primary series is accompanied by a four-period mean.

Typical applications

Moves through 40 or 60 often mark early momentum shifts. Crossings below 30 or above 70 highlight extreme volatility bias.

Practical Checklist for Using the RVI

  • Adjust 40/60 and 30/70 bands to the asset’s own history.
  • Pair the RVI with a long-term trend filter.
  • Re-visit thresholds when volatility regimes change.

Frequently asked questions

What does the RVI reveal? It shows whether volatility is biased to up or down days.

Why 14 periods? It mirrors Relative Strength Index convention.

How to read extremes? Below 30 = bearish volatility; above 70 = bullish volatility.

Closing remarks

The relative volatility indicator condenses complex price action into a bounded figure that clarifies risk skew.