Since 1975 the STI has dropped >4% on 52 occasions. Here is how they look on subsequent days:
You can clearly see those dates on the right hand site closely correspond to the periods of high volatility, of the good kind as well as the bad kind (the full list of 52 dates got cut off, sorry). We can make the chart less messy by taking only averages:
Which shows a typical post-4%-drop rebound in a slight majority of cases.
The above is “weighted by volatility” in that we observe multiple instances of very volatile periods, for example in January 1998 where the STI dropped -4.94%, -7.12%, and -7.43% on consecutive days (ouch). So if we remove the subsequent instances and only observe the first instance, we get a “volatility adjusted” observation of 22 price paths:
and the average is …