Statistics are used to estimate stock price movement (and futures and indices as well) in many areas of financial analysis. For example, we have written extensively about the use of probabilities to aid us in choosing viable option strategies. Stock mutual fund managers often use volatility estimates to help them determine how risky their portfolio is. The uses are myriad. Unfortunately, almost all of these applications are wrong! Okay, maybe wrong is too strong of a word, but almost all estimates of stock price movement are overly conservative. This can be very dangerous if one is using such estimates for the purposes of, say, writing naked options or engaging in some other such strategy in which stock price movement is undesirable.
