Re:Simple Trick to Convert Volatility
Reader asks, "I have weekly volatilities over 370 weeks, I like to convert this into an annualized volatility. How does this work?"
Since volatility is weekly, in the linear case the multiplier would be 52 (weeks per year) , so for volatility you should multiply your weekly volatility by √ 52.
In fact, the length of the measurement - 370 weeks - does not matter at all. If you would have 3 weeks or 7 weeks of weekly volatilities, multiplier would be the same. It is the frequency of observation that matters. To illustrate this consider another example: you have daily volatility over 370 weeks. To annulalize, multiply your daily volatility by √ 252 where 252 is the usual number of trading days per year in the US.